S3 Announces Long-term Strategy for Its Rio Digital Audio Line

Business Wire, May 2, 2000

About S3 Incorporated

Following its announcement that it will be transferring its PC graphics assets to a separate joint venture company, S3 has been relaunched as a digital media company focused on creating products and partnerships that help build the digital home. Combining significant financial assets with a strong technology portfolio, that includes the Rio family of digital audio players and the HomeFree series of home networking solutions, S3 is uniquely positioned to capitalize on high growth opportunities in the rapidly converging Internet and consumer device markets.

Except for the historical information contained herein, the matters set forth in this press release, such as statements as to the expected timing and availability of new Rio Audio products, home and car components, and third generation players of the Rio family, the expected announcements of Rio Audio partners, and expected features of the new products, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially, including the impact of competitive products and pricing and of alternative technological advances, S3's ability to enter into and work with its strategic partners to accomplish the goals of those relationships, S3's ability to develop and successfully bring to market in a timely manner the products described with the features detailed above, and other risks detailed from time to time in S3's SEC reports, including its annual report on Form 10-K for the year ended December 31, 1999. S3 is a registered trademark of S3 Incorporated. The S3 corporate logo, Rio, Rio Jukebox, Rio Receiver and HomeFree are trademarks of S3 Incorporated. Other marks referenced herein are the property of their respective owners.