Diamond Multimedia Inks Deal With Intel Corporation to Support Intel740 Graphics Controller.

SAN JOSE, Calif.--(BUSINESS WIRE)--Feb. 12, 1998--

Diamond Teams with Intel to Deliver High-Performance AGP Graphics 

Solution to Mainstream PC Users

Diamond Multimedia Systems, Inc. (NASDAQ:DIMD), a leader in interactive multimedia acceleration, today announced that as part of its widespread AGP (Accelerated Graphics Port) initiative, the company has selected Intel Corporation's new Intel740 graphics controller for inclusion in a forthcoming graphics accelerator subsystem. Diamond's Intel740-based AGP 2X graphics accelerator will be targeted to mainstream PC users running the latest Pentium(R) processor based II PCs and is expected to be available late in the first quarter of 1998.

Diamond is extensively supporting the migration from the PCI-bus to AGP with next generation accelerators for its retail, distribution, VAR and OEM customers. At present, the majority of Diamond's VAR and OEM customers have migrated to AGP, and significant retail and distribution penetration is expected to follow by the end of the year. Diamond has already launched several first-generation AGP solutions for its VAR and OEM customers and is readying second-generation products, including the Intel740-based accelerator, for release during the first half of this year.

"As the leading provider of graphics subsystems, Diamond is renowned for delivering the highest performing solutions for every PC computing platform," said Scott Vouri, vice president and general manager of the graphics business unit at Diamond Multimedia. "AGP is an exciting new growth opportunity, enabling advanced high-quality 3D, 2D and video for the mainstream PC consumer."

Diamond has selected the Intel740 chip for its robust graphics capabilities and true AGP 2X native design for the Pentium II platform. Diamond's upcoming Intel740 accelerator subsystem will take full advantage of the graphics controller's innovative 3D architecture, fast 2D acceleration and MPEG-II video playback capabilities and will be optimized with Diamond's own maximized AGP drivers and hardware design.

"Diamond Multimedia's support of the Intel740 graphics controller is significant in helping to establish Intel graphics technology as the choice solution for breakthrough 3D graphics performance on the PC," said Bob Gregory, director of graphics marketing at Intel Corporation.

Diamond's AGP Lineup

According to International Data Corporation (IDC)(a), Diamond Multimedia is the world's largest provider of branded graphics boards. Diamond is a silicon independent company, which allows it the freedom to quickly deliver the newest technology with the right combination of features and price for its various customers and channels. Diamond Multimedia has already launched first generation AGP accelerators based on graphics controllers from leading silicon suppliers, including: the Fire GL 1000 Pro which features 3D Labs' Permedia 2 chipset; the Viper model V330 featuring nVIDIA's RIVA 128 chipset; and the Stealth 3D 4000 with S3 Corporation's ViRGE GX-2 chipset. These products are currently available for VARs, system integrators and OEMs.

The AGP Advantage

The AGP interface specification, developed in cooperation with Intel, significantly increases the performance of memory-intensive, real-time 3D graphics on the PC by providing a direct connection between the graphics subsystem and system memory. AGP allows the graphic subsystem to store critical texture memory and z-buffer data in system memory while providing efficient memory management and much higher data transfer rates than the PCI bus (133 MHz versus 33 MHz, respectively) for peak performance as high as 1 GB/second of data transfer. AGP's efficient use of existing system memory allows for the design of lower cost, higher performance graphics subsystems. Moreover, while designed to optimize 3D graphics performance, AGP's efficient use of frame buffer memory also boosts 2D graphics performance. Further information about AGP features and benefits can be found at Diamond's AGP-specific web site launching later this month at www.diamondmm.com/agp.

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 hard drive 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 and SCSI accelerators, and the Supra(R) series of modems. Diamond also markets DVD and video phone kits. 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] 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] Product Support (Voice), United States: 541/967-2450;

Europe (Germany) [phone]; Europe (UK) [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: 800/468-5846 Investor Relations: 408/325-7476; 888/474-3463 (U.S. and Canada) 24-Hour Fax-On-Demand Service: 800/380-0030 FTP site: ftp.diamondmm.com BBS: 541/967-2444 (to 33.6 Kbps) or 408/383-0551 (ISDN);

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

or [phone] (ISDN); Europe (UK) at [phone]

(to 33.6 Kbps) -0-

Note to Editors: Monster 3D and Supra are either trademarks or registered trademarks of Diamond Multimedia Systems, Inc. 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 introduction are in the United States of America. The product name contents, prices and availability may differ elsewhere in the world according to local factors and requirements. -0-

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.

Note (a):IDC's Desktop Graphics and Multimedia: Hardware Report/ The Graphics Accelerator Add-In Board Market Review and Forecast, October 1997.

CONTACT: Diamond Multimedia Systems, Inc.

Mary Medeiros, 408/325-7350

[e-mail]

or

Faiola Davis Public Relations 

Andrea Sausedo/Heidi Davi, 213/933-4959

[e-mail]