Broadcom and S3 collaborate on Networked RIO Audio Devices; Broadcom's iLine10 Links S3's New Rio Digital Audio Receiver to Music on Home PC.

Business Editors/High Tech Writers

IRVINE, Calif. and VANCOUVER, Wash.--(BUSINESS WIRE)--May 25, 2000

Broadcom Corporation (NASDAQ: BRCM), the leading provider of integrated circuits enabling high-speed broadband communications to and throughout the home and S3 Incorporated (NASDAQ: SIII), the leader in digital audio and Internet appliances, announced today a collaboration to provide a home networking solution for the new Rio home audio system.

Now, digital music distribution throughout the home is made possible with Broadcom's iLine10(tm) home networking solution and S3's Rio Digital Audio Receiver(tm).

S3's new Rio Receiver eliminates the need for multiple stereo systems or moving CDs from room-to-room in the home, which means time-consuming music duplication is no longer necessary. The Rio Receiver, embeds the latest home phoneline networking standard, HomePNA 2.0, giving consumers quick access to locally-stored digital audio files residing on a connected PC or residential gateway.

"Until now, digital audio in the home has been tied to the PC," said Jim Cady, President for S3's Rio Audio Group. "Our new Rio Receiver with Broadcom's home networking solution allows consumers to quickly pipe and listen to their digital music collections throughout the house."

This new category of home entertainment is fed through an embedded Broadcom iLine10 home networking silicon system (basis for HomePNA 2.0 standard) giving S3 products ability to play locally-stored digital music content anywhere in the home. Forrester Research estimates that by the year 2003, 32 million portable digital audio devices will be sold.

"Our customers are extremely interested in building Internet-connected devices that offer consumer entertainment content in real time or on demand over the home network," said Jeff Thermond, vice president and general manager of Broadcom's Home Networking Business Unit. "The ability to network S3's receiver exemplifies this new category of Internet Entertainment devices now available to the consumer. Incorporating standardized home networking with a Quality of Service element means simultaneous shared Internet access and streaming digital music content is a reality today," added Thermond.

About S3 Incorporated

Following its acquisition of Diamond Multimedia and the transfer of its graphics chip assets to a joint venture company, S3 has been relaunched as a digital media company focused on creating products and partnerships that help build the digital home. Combining significant financial assets with a strong technology portfolio, that includes the Rio family of digital audio players and the HomeFree series of home networking solutions, S3 is uniquely positioned to capitalize on high growth opportunities in the rapidly converging Internet and consumer device markets.

About Broadcom

Broadcom Corporation is the leading provider of highly integrated silicon solutions that enable broadband digital transmission of voice, video and data to and throughout the home and within the business enterprise. Using proprietary technologies and advanced design methodologies, the company designs, develops and supplies integrated circuits for a number of the most significant broadband communications markets, including the markets for cable set-top boxes, cable modems, high-speed office networks, home networking, Voice over Internet Protocol (VoIP), residential broadband gateways, direct broadcast satellite and terrestrial digital broadcast, and digital subscriber line (xDSL). Broadcom is headquartered in Irvine, Calif., and may be contacted at 949-450-8700 or at www.broadcom.com.

Except for historical information contained herein, the matters set forth in this press release are forward-looking statements that are subject to risk and uncertainties, including the impact of competitive products and pricing and of alternative technological advances and other risks detailed from time to time in S3's SEC reports, including its quarterly report on Form 10-Q for the quarter ended March 31, 2000. S3 is a registered trademark of S3 Incorporated. The S3 corporate logo, Diamond Multimedia and HomeFree are trademarks of S3 Incorporated. Rio is a trademark of RioPort.com, Inc. and is used by S3 under license from RioPort.com, Inc. Other marks referenced herein are the property of their respective owners.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

This release may contain forward-looking statements based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will" and variations of these words or similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors.

Important factors that may cause such a difference for Broadcom in connection with it's S3 customer relationship include, but are not limited to, the timing and successful completion of technology and product development through volume production; the rate at which our present and future customers and end-users adopt Broadcom's technologies and products in the markets for advanced cable modem products; delays in the adoption and acceptance of industry standards in the foregoing markets; the timing of customer-industry qualification and certification of our products and the risks of non-qualification or non-certification; the timing, rescheduling or cancellation of significant customer orders; the loss of a key customer; the volume of our product sales and pricing concessions on volume sales; silicon wafer pricing and the availability of foundry and assembly capacity and raw materials; the qualification, availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products; intellectual property disputes and customer indemnification claims; fluctuations in our manufacturing yields and other problems or delays in the fabrication, assembly, testing or delivery of our products; our ability to specify, develop, complete, introduce, market and transition to volume production new products and technologies in a timely manner; the effects of new and emerging technologies; the effectiveness of our product cost reduction efforts; the risks of producing products with new suppliers and at new fabrication and assembly facilities; problems or delays that we may face in shifting our products to smaller geometry process technologies and in achieving higher levels of design integration; the risks and uncertainties associated with our international operations; our ability to retain and hire key executives, technical personnel and other employees in the numbers, with the capabilities, and at the compensation levels needed to implement our business and product plans; changes in our product or customer mix; the quality of our products and any remediation costs; the effects of natural disasters and other events beyond our control; the level of orders received that can be shipped in a fiscal quarter; potential business disruptions, claims, expenses and other difficulties resulting from "Year 2000" problems in computer-based systems used by us, our suppliers or our customers; general economic conditions and specific conditions in the markets we address; and other factors.

Our recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange Commission filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. Broadcom(R), iLine10(TM) and the Broadcom pulse logo are trademarks of Broadcom Corporation and/or its subsidiaries in the United States and certain other countries.