Diamond Multimedia Partners With Compaq Europe to Offer Award-winning Supra 56K Modems in Consumer PC Line.

VANCOUVER, Wash.--(BUSINESS WIRE)--Dec. 8, 1998--Diamond Multimedia Systems, Inc. (Nasdaq:DIMD), a leader in interactive multimedia and PC entertainment, today announced that Compaq's Consumer PC European Division has chosen Diamond Multimedia's award-winning Supra brand of 56K modems for Compaq's consumer PCs, including Desktop and Mini/Micro tower machines.

Compaq will use the Diamond Supra 56K modems as a standard peripheral in Compaq's range of consumer computers throughout Europe.

"Diamond's high-performance modems are engineered to deliver fast, consistent connections for today's demanding Internet user," said Jim Cady, vice president and general manager of Diamond Multimedia's Communications Division. "Combining Diamond's communications expertise with Compaq's quality components, systems engineering and brand recognition provides the user with a top-notch solution."

"Diamond's Supra 56K modem provides our customers with the latest technology, performance and ease of use required to maximize their Internet experience," said Toon Bouten, vice president of Consumer Products, Compaq Europe. "Diamond Multimedia was able to provide us with a PCI modem solution which is homologised for Europe, meets the PC 98/99 requirements and can also lower our support costs."

Diamond Multimedia's Supra brand modems are designed from the ground up for optimized 56K performance and incorporate K56flex and V.90 technology for some of the highest transmission speeds available today over ordinary phone lines. Additionally, Diamond's Supra brand modems offer the consumer universal compatibility and full interoperability.

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.

Howand 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): +49-8151-pport (Voice), United States: 541/967-2450; Europe

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

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

(France) [phone] Pre-sales Information: 800/468-5846 24-Hour Fax-On-Demand Service: 800/380-0030 Investor Relations: 408/325-7476; 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.