THIRD AMENDMENT TO CONTRIBUTION AGREEMENT

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Exhibit 10.4

THIRD AMENDMENT TO CONTRIBUTION AGREEMENT

         THIS THIRD AMENDMENT TO CONTRIBUTION AGREEMENT (the " Amendment " ) is dated as of September 1, 2003, and is entered into by and among JAZZ SEMICONDUCTOR, INC. (formerly known as Specialtysemi, Inc.), a Delaware corporation ( " 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. , a Delaware limited partnership ("Carlyle High Yield" and, together with CP III and CP III Coinvestment, "Carlyle" ).

RECITALS

         WHEREAS, Company, Conexant and Carlyle Capital Investors, L.L.C. a Delaware limited liability company (" Carlyle Capital ") are parties to that certain Contribution Agreement dated as of February 23, 2002, as amended by that certain First Amendment to Contribution Agreement dated as of March 12, 2002 and that certain Second Amendment to the Contribution Agreement dated as of July 1, 2002 (as amended, the " Contribution Agreement " );

         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; and

         WHEREAS, Company, Conexant and Carlyle wish to amend the Contribution Agreement.

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 Recital.     Subpart (ii)(6) of the third Recital to the Contribution Agreement is hereby amended an