TERMINATION AGREEMENT

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.21

TERMINATION AGREEMENT

        This TERMINATION AGREEMENT (this "Agreement" ) is made and entered into as of May 28, 2004, by and between JAZZ SEMICONDUCTOR, INC. , a Delaware corporation (the "Company" ), and TC GROUP, L.L.C. , a Delaware limited liability company ( "Carlyle" ).

RECITALS

         WHEREAS , the Company and Carlyle entered into a Carlyle Management Agreement on March 12, 2002 whereby the Company appointed Carlyle to render advisory and consulting services (the " Management Agreement ");

         WHEREAS, in connection with the registration of securities of the Company pursuant to a Registration Statement on Form S-1 (333-112071) filed with the Securities and Exchange Commission and the subsequent sale and issuance of such securities (the " IPO "), the Company and Carlyle wish to terminate the Management Agreement with the exception of certain indemnification provisions that shall survive the termination of the Management Agreement as specified in this Agreement.

AGREEMENT

         NOW, THEREFORE , the parties to this Agreement, for good and valuable consideration, the receipt and sufficiency of which is acknowledged and agreed, hereby agree as follows:

         1.    Termination.     

         (a)   Management Agreement.     The Company and Carlyle hereby agree that effective immediately prior to the Closing (as defined in the Underwriting Agreement to be entered into by and among the Company and the underwriters' representatives in connection with the IPO), the Management Agreement shall terminate in its entirety and be of no further legal force or effect; provided that Sections 5, 7 and 8 of the Management Agreement shall survive such termination until later amended, waived or terminated in accordance with the terms of the Management Agreement.

         (b)   Termination Fee.     The Company and Carlyle hereby agree that promptly following termination of the Management Agreement in accordance with this Section 1, the Company will pay to Carlyle a cash payment in the amount of $900,000.00 (the " Termination Fee "). The Company