SECOND AMENDMENT TO THE CONTRIBUTION AGREEMENT

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Exhibit 10.3

SECOND AMENDMENT TO THE CONTRIBUTION AGREEMENT

        This SECOND AMENDMENT TO THE CONTRIBUTION AGREEMENT (the " Second Amendment ") by and among Jazz Semiconductor, Inc., a Delaware corporation formerly known as Specialtysemi, Inc. (the " Company "), Conexant Systems, Inc., a Delaware corporation (" Conexant "), and Carlyle Partners III L.P., a Delaware limited partnership (" CP III "), CP III Coinvestment, L.P., a Delaware limited partnership (" CP III Coinvestment ") and Carlyle High Yield Partners, L.P. (" Carlyle High Yield " and, together with CP III and CP III Coinvestment, " Carlyle ") is entered into as of the 1st day of July, 2002.

RECITALS

         WHEREAS, the Company, Conexant, and Carlyle Capital Investors, L.L.C., a Delaware limited liability company (" Carlyle Capital ") have entered into that certain Contribution Agreement dated February 23, 2002 (the " Contribution Agreement ");

         WHEREAS, the Company, Conexant, and Carlyle Capital have entered into that certain First Amendment to the Contribution Agreement dated March 12, 2002 (the " First Amendment ");

         WHEREAS, pursuant to that certain Assignment and Assumption Agreement by and between Carlyle Capital and Carlyle, dated as of March 12, 2002, Carlyle Capital has assigned all of its rights and obligations under the Contribution Agreement to Carlyle;

         WHEREAS , the Company, Conexant, and Carlyle wish to further amend the Contribution Agreement as set forth herein.

AGREEMENTS

         NOW THEREFORE, in consideration of the promises and mutual agreements and covenants set forth herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

        1.     Defined Terms.     Capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Contribution Agreement.

        2.     Amendment to Section 1.5.     Section 1.5 of the Contribution Agreement is hereby amended by replacing the section in its entirety with the following language:

1.5   Royalties.

        (a)    As partial consideration for the contribution by Conexant to the Company of the Membership Interests as contemplated by Section 1.1(a), the Specialtysemi Group Companies or any Specialtysemi Group Successor shall, subject to Section 8.10 hereof, pay to Conexant a royalty equal to the Royalty Percentage (as defined below) of the Gross Revenue of the Specialtysemi Group Companies or any Specialtysemi Group Successor, as applicable, derived or earned from the sale of SiGe Products. The "Royalty Percentage" shall mean five percent (5%) for the [...***...] period commencing on the Closing Date; thereafter, the Royalty Percentage shall be reduced as follows: (i) during the [...***...] period commencing on [...***...], the Royalty Percentage shall be [...***...] percent ([...***...]%); (ii) during the [...***...] commencing on [...***...], the Royalty Percentage shall be [...***...] percent ([...***...]%); (iii) during the [...***...] period commencing on [...***...], the Royalty Percentage shall be [...***...] percent ([...***...]%); and during the [...***...] period commencing on [...***...], the Royalty Percentage shall be [...***...] percent ([...***...]%). No such royalties will be due for sales that occur more than ten (10) years after the Closing Date, and no royalties will be due for sales by any Specialtysemi Group Successor other than sales (directly or indirectly through any Subsidiary) to third party customers. (As used herein, the term " sale " shall include leases, licenses, and all other dispositions of SiGe Products but shall not include proceeds from the disposition of SiGe Products in connection with the sale of any business or the sale of all or substantially all of the assets of any business or business unit.)

Confidential treatment is being requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission.

        (b)    For the purposes of this Section 1.5, "SiGe Products " shall mean each wafer (or portion thereof) or other product that is fabricated, manufactured or produced, in whole or in part, with the use of silicon germanium (SiGe) specialty process technology other than any SiGe specialty process technology that is purchased, acquired or obtained by license by the Specialtysemi Group Companies from a third party for value following the Closing Date and that is not based upon or derived from and does not embody, contain or include a