Diamond Multimedia Grows OEM Partnership With Packard Bell NEC.

VANCOUVER, Wash.--(BUSINESS WIRE)--Dec. 15, 1998--

Diamond's Award-Winning, High-Speed SupraMax 56K Modems to Be Featured in Select Retail Packard Bell and NEC Ready Computer Systems

Diamond Multimedia Systems, Inc. (Nasdaq: DIMD), a leader in interactive multimedia and PC entertainment, today announced that the company has expanded its OEM business relationship with Packard Bell NEC to include shipments of its SupraMax 56K modems. Under the terms of the agreement, Diamond's Supra(R) modems will be pre-installed and integrated as a standard equipment component in selected Packard Bell and NEC Ready computers sold in retail stores nationwide.

"Through OEM agreements with our graphics accelerators and modem products, Diamond Multimedia is enjoying a very positive, long-term business relationship with Packard Bell NEC," said Jim Cady, vice president and general manager of Diamond Multimedia's Communications Division. "This latest design win builds upon the alliance between Diamond and Packard Bell NEC, and allows us to deliver a faster and more satisfying Internet experience to consumers."

Designed to deliver optimized 56K performance for some of the highest transmission speeds available over ordinary phone lines, Diamond Multimedia's SupraMax brand of 56K modems were chosen after undergoing stringent qualification testing by Packard Bell NEC. Known for issuing strict requirements to potential hardware peripheral manufacturers, Packard Bell NEC only selects those components that deliver the best combination of quality and performance.

"Packard Bell NEC relies on companies like Diamond Multimedia to deliver top-quality components that provide the best combination of performance, reliability and functionality for our customers," said Mal Ransom, senior vice president of Packard Bell NEC, Consumer Division. "The addition of Diamond's SupraMax 56K modems to the Packard Bell and NEC Ready lines of computers reaffirms this goal by including award-winning communications technology in our popular, high-performance PCs."

About Diamond Multimedia

Diamond Multimedia is driving the interactive multimedia market by providing advanced solutions for home, business and professional desktop computer users, enabling them to create, access and experience compelling new media content from their desktops and through the Internet. Diamond accelerates multimedia from the Internet to the user with products that include the Stealth and Viper(R) series of media accelerators, the Monster series of entertainment 3D and sound accelerators, the Fire series of professional 3D accelerators, the Micronics series of system boards, the Supra(R) series of modems, and the HomeFree line of home networking products. Diamond's common stock is traded on the Nasdaq Stock Market under the symbol DIMD, and its web site address is www.diamondmm.com.

How to Contact Diamond Multimedia

There are many ways to reach Diamond for sales support, technical assistance, driver updates and general information:

Internet Web Site: http://www.diamondmm.com Diamond Multimedia's Headquarters and Multimedia Division:

408-325-7000; Fax: [phone] Systems Business Unit (Micronics brand system boards)

Main Phone Number: 510-651-2300 Communications Division (Supra brand modems)

Main Phone Number: 360-604-1400; Fax: [phone] European Division (Germany): [phone]; (UK): [phone];

(France) [phone] Korean Office (Seoul): [phone]; Fax: [phone] Japanese Office (Tokyo): [phone]; Fax: [phone] ASEAN Office (Singapore): [phone]; Fax: [phone] Hong Kong Office: [phone]; Fax: [phone] Australian Office (Sydney): [phone]; Fax [phone] Swedish Office: [phone]; Fax [phone] Product Support (Voice), United States: 541-967-2450;

Europe (Germany) [phone];

Europe (UK) [phone]; Europe (France) [phone];

TDD/TTY Support 541-967-2451 Product Support (Fax), United States: 541-967-2401;

Europe (Germany) [phone]; Europe (UK): [phone];

(France) [phone] Pre-sales Information: 1-800-468-5846 24-Hour Fax-On-Demand Service: 1-800-380-0030 Investor Relations: 408-325-7476; 1-888-474-3463 (U.S. and Canada) FTP site: ftp.diamondmm.com BBS: 541-967-2444 (to 33.6 Kbps);

Europe (Germany) BBS at [phone] (to 28.8 Kbps)

or [phone] (ISDN);

Europe (UK) at [phone] (to 33.6 Kbps)

Monster 3D, Supra and HomeFree are either trademarks or registered trademarks of Diamond Multimedia Systems, Inc. Monster(R) is a registered trademark of Monster Cable. Viper(R) is a registered trademark of Directed Electronics, Inc., Used under License. All other trademarks referenced are the service mark, trademark or registered trademark of their respective manufacturers. This announcement relates to products whose introductions are in North America. The product name, contents, prices and availability may differ elsewhere in the world according to local factors and requirements.

Except for historical information contained herein, the matters set forth in this press release, such as statements relating to the Company's ability to successfully exploit technological and market developments, the timing and success of new product introductions by the Company and its competitors, and the Company's ability to invest in new technologies and to enhance its existing systems are forward-looking statements that are subject to risks and uncertainties, including the impact of competitive products and pricing and alternative technological advances, the timely and successful development and market acceptance of new products and upgrades to existing products, and other risks as detailed from time to time in Diamond Multimedia's SEC filings, including its most recent Forms 10-K and 10-Q.