Pixelworks Adds Increased Flexibility for Digital Projector Designs with Next-Generation Opal ImageProcessor IC and New 'Cranberry' Keystone Correction IC.

LAS VEGAS -- Pixelworks, Inc. (Nasdaq:PXLW), a leading provider of system-on-chip ICs for the advanced display industry, announced today two new products that add functionality to digital projector designs. With the introduction of a third generation of the all-in-one Opal family of ImageProcessor ICs and the new 'Cranberry' PW600 Keystone Correction chip Pixelworks is continuing to offer innovative solutions for digital projector manufacturers.

The latest additions to the all-in-one Opal family, the PW190B and PW390B ImageProcessor ICs, feature the latest evolution of Pixelworks' proven front-end that includes the Eurosync[TM] video decoder and high-speed triple ADC optimized for fast-blanking support, integrated teletext and 2:2 pull-down. The chips also include the Pixelworks motion-adaptive deinterlacer that operates at up to 1900-by-1080 resolution and image processing core featuring the latest DNX[TM] video processing technology.

The new Opal ICs feature the addition of a USB[R] interface compatibility that increases ease-of-use, in particular in business settings. Enabling control of the digital projector through a USB interface makes connection to a laptop computer simple via the widely accepted connector. Manufacturers can utilize the USB interface to implement common projector functions such as remote mouse or remote diagnostics.

The PW600 Keystone Correction IC codenamed Cranberry is a companion chip designed to extend horizontal keystone correction to 45 degrees. The PW600 complements the Opal family of Pixelworks ImageProcessor IC to achieve a maximum range of 45 degrees of horizontal and vertical keystone correction. The Cranberry co-processor chip features 10-bit processing for a complete video signal path capable of displaying more than one billion colors.

"Pixelworks has a well-deserved reputation as an innovative developer of chips that enable new feature and functions for digital projectors," said Hans Olsen, President and CEO of Pixelworks, Inc. "The new Opal products and the Cranberry co-processor chip demonstrate that we continue to drive functionality for digital projectors that our customers can leverage for differentiation to consumers."

The PW190B and PW390B ImageProcessor ICs will be sampling in the first quarter. The PW600 Keystone Correction IC is available now. To learn more about these products, contact the Pixelworks sales office in your region. A list of contacts is available at www.pixelworks.com.

About Pixelworks, Inc.

Pixelworks, headquartered in Tualatin, Oregon, is a leading provider of system-on-chip ICs for the advanced display industry. Pixelworks' solutions provide the intelligence for advanced televisions, multimedia projectors, digital streaming media devices and flat panel monitors by processing and optimizing video and computer graphics signals to produce high quality images. Many of the world's leading manufacturers of consumer electronics and computer display products utilize our technology to enhance image quality and ease of use of their products.

For more information, please visit the company's Web site at www.pixelworks.com.

Pixelworks[R], the Pixelworks logo[R], Eurosync[TM] and DNX[TM] are trademarks of Pixelworks, Inc. All other trademarks are the property of their respective owners.

Safe Harbor Statement

This press release contains statements that are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Statements by Hans Olsen and statements such as "The PW190B and PW390B Image Processor ICs will be sampling in the first quarter" are based on current expectations, estimates and projections about the company's business. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Actual results could vary materially from the description contained herein due to many factors including business and economic conditions; changes in growth in the advanced display industry, including without limitation the HDTV or digital projector industries; the non-acceptance of the technologies by leading manufacturers; competitive factors such as rival chip architectures or pricing; discovery of any material and currently unknown product problems; shortages of manufacturing capacity from or failures in timely delivery by our third-party foundries; litigation involving antitrust and intellectual property and other risk factors listed from time to time in the company's Securities and Exchange Commission filings. In addition, such statements are subject to the risks inherent in investments in and acquisitions of technologies, including the timing and successful completion of technology and product development through volume production, integration issues, unanticipated costs and expenditures, changing relationships with customers, suppliers and strategic partners, and potential contractual, intellectual property or employment issues. The forward-looking statements contained in this press release speak only as of the date on which they are made, and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this news release. If the company does update one or more forward-looking statements, investors and others should not conclude that the company will make additional updates with respect thereto or with respect to other forward-looking statements.