Southwall and BERLINER GLAS Announce New Product Designed Into Hewlett-Packard's New Tablet PC.

Business Editors/High-Tech Writers

PALO ALTO, Calif.--(BUSINESS WIRE)--Dec. 17, 2002

Southwall Technologies Inc. (Nasdaq:SWTX) and BERLINER GLAS, Berlin, Germany, revealed today that the new Compaq 1000 Tablet PC's LCD display benefits from a high performance film to glass laminate produced by the two companies. Combining Southwall's anti-reflective film with Berliner Glas' anti-glare technical glass greatly reduces unwanted reflected light and provides a smooth, strong writing surface. Both are important needs for Tablet PC users.

The Compaq 1000 is a fully functional PC in a slate like design on the display of which the user is able to write to take notes or access files. The unit can be used flat on a desk like a pad of paper, or held at an angle. Southwall's sputter coated thin film ARC2 product provides high visible transmission to maintain optical clarity, while greatly reducing reflected ambient light and significantly improving the viewing experience for LCD users.

The glass finished by BERLINER GLAS is etched in order to avoid reflection and to guarantee clear, true colors. The glass can be etched single or double sided in a thickness of 1mm - 6 mm with various levels of surface roughness and gloss values. Additionally, the panel is chemically strengthened and laminated with Southwall's anti-reflective film. Finally, the silk screen printing provides functional support and accentuate the design of the Tablet PC.

"The Southwall anti-reflective film allows us to achieve the critical optical and mechanical performance demands for the Compaq Tablet PC display glass," stated Jorg Bannicke, Vice President of Berliner Glas. "Laminating the Southwall Technologies film to our glass easily integrates into our manufacturing process."

"The ARC2 high performance anti-reflective film enhances the Berliner Glas anti-glare glass providing the highly desirable surface characteristics for the new Compaq 1000 Tablet PC," said Thomas G. Hood, President and CEO, Southwall Technologies. "This application is complementary with other high performance films we have employed in electronic displays to reduce reflection. This new and exciting application showcases our ability to quickly develop high performance antireflective solutions to satisfy the display industry's increasing needs for improved optical performance. We are pleased to be partnering with Berliner Glas."

According to several industry sources, tablet PC units sold by all manufacturers are expected to reach at least 7 million over the next year, depending on, among other market factors, the rate of early adoption.

About Southwall Technologies Inc.

Southwall Technologies (www.southwall.com) designs and produces thin film coatings that selectively absorb, reflect or transmit light. Southwall products are used in a number of automotive, electronic display and architectural glass products to enhance optical and thermal performance characteristics, improve user comfort and reduce energy costs. Southwall exports advanced thin film coatings to over 25 countries around the world for use in products manufactured by such companies as Audi, BMW, DaimlerChrysler, Renault, Peugeot-Citroen, Volvo, Saint-Gobain Sekurit, Pilkington, and Mitsubishi Electric .

About BERLINER GLAS

BERLINER GLAS offers display panels made of glass or plastics with various functional features like single or double-sided optical or chemical anti-reflection layers, lamination with coated films, mesh films to avoid electromagnetic radiation (EMC), PVB films and silk screen printing with 2-component, UV or frit-ink colors. Furthermore, BERLINER GLAS offers a wide range of options for glass refinement. These panels constitute an important component for all applications in which making information visible is involved.

BERLINER GLAS supplies precision optics and technical glass to top suppliers in the strategic market segments of information technology and communications, industrial sensors, the semiconductor industry, as well as medical technology and biotechnology, and offers solutions for all areas of industry making use of light. The BERLINER GLAS Group employs around 630 people today in Germany, Switzerland and the USA.

This press release may contain forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995), including, without limitation, statements regarding the Company's expectations, beliefs, intentions or strategies regarding the future. All forward-looking statements in this press release are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those presented. These risks include the possibility that Compaq will decide to use another supplier of anti-reflective films for some or all of its Tablet PC in the future, that the number of Tablet PCs sold will be significantly fewer than expected, that production costs at the company's facilities will increase, that Southwall will experience manufacturing or quality problems in the future that will impair its ability to produce or provide sufficient quantities of product for Compaq, that actual orders for products or revenues to Southwall for use in Tablet PCs will be materially lower than expected, that Southwall will experience significant warranty or indemnification obligations in connection with the product produced for Compaq, that Southwall's costs to produce product for Compaq will be higher than anticipated, that the agreement will not be profitable to Southwall, that Southwall will be directly or indirectly harmed by negative developments for Compaq and/or Berliner Glas, as well as risks associated with Southwall's failure to meet covenants under credit facilities and strains on the company's liquidity. Further risks are detailed in the Company's filings with the Securities and Exchange Commission, including those set forth in the Company's most recent Form 10-K filed on April 1, 2002 and its most recent Form 10-Q filed on November 13, 2002.