S3's Rio Division Ships Rio 600

Following its acquisition of Diamond Multimedia and the transfer of its graphics chip assets to a joint venture company, S3 has been re-launched 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 historical information contained herein, the matters set forth in this press release, such as statements as to the Rio brand being the established leader in the high-growth digital music market, the Rio 600's ability to enter the channel quickly and comprehensively and record labels' willingness to work with the Rio 600, are forward-looking statements that are subject to risk and uncertainties, including the impact of competitive products and pricing and of alternative technological advances, the ability of S3 to produce and move product into its distribution channels and the cooperation of its distribution channel partners, the ability of S3 to secure deals with record labels, and other risks detailed from time to time in S3's SEC reports, including its quarterly report on Form 10-Q for the quarter ended March 31, 2000. S3 is a registered trademark of S3 Incorporated. The S3 corporate logo, Diamond Multimedia and HomeFree are trademarks of S3 Incorporated. Rio is a trademark of RioPort.com, Inc. and is used by S3 under license from RioPort.com, Inc. Other marks referenced herein are the property of their respective owners.