Sigma Designs and Acer Team to Create Video-on-Demand Information Appliances.

LAS VEGAS--(BUSINESS WIRE)--Nov. 15, 1999--

Acer's Set-Top Box Uses Sigma's REALmagic Digital Video Decoder

Silicon to Provide Integrated Internet and TV Technology

Sigma Designs(R) (Nasdaq: SIGM), a recognized leader in digital video solutions, and Acer, the world's third-largest PC manufacturer, today announced that the two companies will work together to develop set-top boxes to offer residential customers worldwide broadband multimedia services, including video on demand and interactive TV. Acer's set-top box--the Advanced STB--which includes Sigma's REALmagic(R) video decoder silicon and drivers, will be demonstrated at COMDEX Fall '99, November 15-19 in Las Vegas.

Acer's Advanced STB integrates the Internet and TV, leveraging the PC/TV convergence trend. Hambrecht & Quist has forecast that worldwide shipments of Internet appliances will rise from 5.9 million shipped in 1998 to 55.7 million by 2002, and that consumer usage of Internet appliances/devices will ultimately surpass usage of the personal computer as we know it today. According to IDC, at the end of 1998, over 99 million of 101 million households in the United States had at least one television set, and many had multiple television sets. This sets the stage for popularity of the interactive TV platform. The Acer Advanced STB is designed for consumer electronics companies, telcos, and Internet Service Providers, enabling them to provide next-generation interactive services to their customers. The Acer Advanced STB combines standard Internet applications, such as Web browsing and email, with a new class of applications that merge television programming with Internet content to extend the traditional television experience to provide subscriber services like home shopping and financial information.

According to IDC, DSL deployment is occurring rapidly in the United States. IDC estimates that the telephone industry will close 1999 with as many as 700,000 residential DSL subscribers, up from just 60,000 at the end of 1998.

Combining DSL technology with a video server to provide MPEG video streams provides consumers with a video on demand solution using the set-top box as a video server client. At Comdex, Acer will show how the Acer box, equipped with REALmagic decoder silicon, can provide true time-shifted video on demand over a switched network. This revolutionary demonstration will show how, using today's latest network technology, anyone can come home from work and watch any program that was played on any TV channel that day, with fast forward and reverse play.

Widely recognized as one of the most highly integrated single-chip MPEG solutions on the market, Sigma's REALmagic EM8220 decoder silicon provides flicker-free video at full-screen resolution; video data is scaled and displayed in clear, crisp images on the TV set. Sigma Designs drivers are compatible with multiple video servers.

Acer is the third largest PC producer in the world and was recently named the number one computer brand in a poll conducted by Readers' Digest. "We are very pleased to work with Sigma Designs and benefit from its enabling technology in our Advanced STB," stated Scott Chien, AVP of Acer's SIA business unit. "The combination of Sigma and Acer will enable us to provide a great interactive TV and video on demand experience to our customers."

"Our collaboration with Acer is another crucial step forward in enabling Sigma's REALmagic digital video decoding technology to support the emerging set-top/information appliance market," said Thinh Tran, chairman and CEO of Sigma Designs. "Our open, standards-based approach to streaming video has enabled our REALmagic EM8220 silicon to become the digital video decoder of choice for any set-top/Internet information appliance. Internet growth is one of today's main drivers, along with e-commerce and any other technology that enables broadband networking. We are delighted to work with Acer in providing new Internet-enabled applications and services," Mr. Tran concluded.

About Acer

Established in 1976, Acer is the world's third-largest PC manufacturer, offering a broad selection of industry-leading high-end servers, multimedia PCs, notebooks, computer peripherals, components, and semiconductors. The Acer Group employs more than 28,000 people in 120 enterprises spanning 37 countries worldwide, supporting dealers and distributors in over 100 countries. The Acer Group's revenue in 1998 was US$6.7 billion. For more information about extranets, and for the emerging set-top box/information appliance market. Sigma is a driving force in advancement of digital video technology used in high-speed high-bandwidth transmission for business, home, and education markets. Sigma Designs' products, marketed under the REALmagic trade name, are sold worldwide through a direct sales force, distributors, and original equipment manufacturers (OEMs). For more information, visit the Company's web site at http://www.sigmadesigns.com.

Editors and Analysts: For additional information, photographs and interviews, please contact Andy Marken, [e-mail] or 408/986-0100.

REALmagic and Sigma Designs are registered trademarks of Sigma Designs. All other products and companies referred to herein are trademarks or registered trademarks of their respective companies.