Zoran Announces Industry's Most Advanced AC-3/MPEG2 Audio Chip; New High Performance Processor Brings Special Audio Effects to Next Generation A/V Receivers and DVD Players.

SANTA CLARA, Calif.--(BUSINESS WIRE)--Dec. 2, 1996--Zoran Corporation (NASDAQ:ZRAN), the world's leading supplier of Dolby Digital (AC-3) devices, announced today the industry's most advanced AC-3/MPEG2 digital audio processor. The new ZR38600 is the industry's only AC-3/MPEG2 processor to use only 75 percent of its available processing power for audio decoding, thereby making 25 percent of the chips' processing resources available to audio/video system manufacturers for product differentiation.

With the programmable ZR38600, system manufacturers can provide customized product features while simultaneously decoding multichannel audio. This means that for the first time 3D audio can be provided to the listener, without the use of additional costly system components. In addition, the ZR38600 implements several DVD-ready functions on-chip, and provides a unique technology that integrates system functions into a single chip in order to optimize performance and reduce system cost. The 3.3 volt ZR38600 is targeted at the high-volume home theater, DVD and next generation consumer multimedia applications.

"The advanced audio processing technology and unique features of the new ZR38600 chip offers customers more flexibility and differentiation than ever before," said Levy Gerzberg, President and CEO of Zoran. "These features are relevant to a wide-range of applications, making the Zoran chip the best candidate for a multitude of next-generation multimedia consumer products. Zoran is committed to meeting customer needs for their specific applications, and will be providing an optimized 2-channel AC-3/MPEG2 device for DVD players and DVD add-on PC applications for the future."

According to Dale Ford of Dataquest, a San Jose based research firm, the forecast for production of DVD standalone players, with their convenient size and improved sound and image quality is expected to reach 10.3 million units by the year 2000. The market for DVD drives for multimedia PCs is expected to reach 24.9 million by the year 2000.

Since Zoran is the first company to ship Dolby-certified AC-3 decoders, Zoran's AC-3 chips are included in first generation DVD players, and in most Dolby Digital surround sound home entertainment systems currently shipping in volume.

Commenting on the new chip, Roger Dressler, technology director of Dolby Laboratories Licensing in San Francisco noted: "We are excited by the new capabilities and level of integration the Zoran ZR38600 provides. By offering 25 percent more computational power, the ZR38600 will enable OEMs to find a competitive advantage in the next wave of consumer and multimedia products where further DSP processing is a key ingredient. Since Zoran's devices are included in virtually all Dolby Digital audio/video systems from leading suppliers around the world, the ZR38600 will ensure a smooth transition to more feature-rich audio products."

"We have been using Zoran devices in our AC-3 A/V amplifier and we were very pleased with the performance, quality and high level of support we received," said Mr. S.C. Jang, Senior Manager, Samsung DVD Center. "The features of the ZR38600 are very impressive, especially the integration of an S/PDIF receiver/transmitter and the extra processing power. The new device will allow Samsung to introduce more competitive systems next year."

High Integration At Reduced Costs

Zoran's ZR38600 high-performance, programmable digital signal processor incorporates in ROM all the necessary software for real-time decoding of Dolby AC-3 5.1-channel digital surround, 2 Channel downmix and Dolby Pro Logic. MPEG2 2-channel audio decoding and bass management software are also in ROM. It includes 16KW on-chip ROM, 9KW of RAM and 1KW of program RAM to offer customers a single, multi-channel decoding solution that eliminates the need for external memory. The 1KW of program RAM also allows the use of customer-specific, downloadable software. Software for MPEG2 5.1-channel is currently under development.

The ZR38600 also incorporates essential system functions on-chip, such as an IEC-958 standard-based S/PDIF interface to support Dolby AC-3, MPEG2 and PCM bitstreams, and two programmable PLLs. One PLL is dedicated to driving audio DACs and ADCs, while the other is dedicated to the DSP. Both the S/PDIF and audio PLL functions are not available on any other AC-3 decoder. The unique integration of these functions on-chip is a major contributor in decreasing system complexity and lowering total system cost.

Zoran's ZR38600 offers exceptionally high performance compared to competitive audio decoders. While other processors use up the full 40 MIPS of processing power for Dolby 5.1 decoding, Zoran's ZR38600 processor requires only 30 MIPs -- leaving 10 MIPs for extra processing. These MIPS are ideally suited to implement 3-D digital sound field algorithms to bring realistic surround sound effects to systems with only two speakers.

All software originally developed for the first generation DVD players using Zoran's ZR38500 and ZR38521 is completely compatible with the ZR38600. The ZR38600 comes with special software developed by Zoran to handle the audio tasks defined by DVD, including audio/video synchronization and MPEG2 audio stream parsing.

The ZR38600 also provides three stereo serial inputs and four stereo serial output ports. The three serial input ports are especially useful when a second DSP following the AC-3 decoder is needed. The fourth output port of the ZR38600 may be used to output Dolby Pro Logic to a VCR while also decoding the 5.1-channel program, or used to output any 8-channels of audio, such as the 8 PCM channels defined by DVD or MPEG7.1

ZR38600 Demonstration Board

To reduce audio equipment manufacturer's time-to-market, Zoran has developed a demonstration board for the ZR38600 digital audio processor. The board is a complete stand-alone AC-3/MPEG audio decoder with six output channels of analog audio from an S/PDIF input stream. A separate RS-232 PC link is provided to allow users to load and test custom software with the demonstration board. Microphone/Line-in inputs are also provided.

Price/Availability

The ZR38600 is available immediately in sample quantities with volume production scheduled for Q1 1997. The ZR38600 is priced at under $20 in high volume. The ZR38600 Demonstration Board is priced at $895 and will be available in Q4, 1996.

About Zoran Corporation

Zoran Corporation (NASDAQ:ZRAN) develops and markets integrated circuits and software for digital video and audio applications enabled by compression. Zoran's product line includes JPEG codecs, MPEG video decoders, and AC-3 and MPEG audio decoders. The company's integrated circuits are used in a variety of video and audio products addressing growing consumer multimedia markets. Current applications for Zoran products include professional and consumer video editing systems, PC-based and stand-alone video CD systems, DVD-ROM and stand-alone players, digital audio systems, and filmless digital cameras. Established in 1983, the company is headquartered in Santa Clara, California and has operations in Haifa, Israel. For more information about Zoran, call [phone]. -0-

Note to Editors: ZR38600 is a trademark of Zoran Corporation.

Dolby Digital, Dolby AC-3 and Dolby Pro logic are trademarks of Dolby Laboratories.

CONTACT: Zoran Corporation, USA

Dave Fronczak, 408/986-1314

[e-mail]

or

Zoran Corporation, Israel

Elad Loker (Investor Contact), (011) 972-4-8-545-763

[e-mail]

or

MCA, Inc.

Carey Mitchell, 415/968-8900

[e-mail]

or

FRB, Inc.

Bonnie McBride (Investor Contact), 415/986-1591

[e-mail]