Creative Labs' High Definition DVD Video Offered On Compaq's Commercial PCS Dxr3 Decoder Board

Creative Technology Ltd. (Nasdaq: CREAF), the leading provider of multimedia solutions for personal entertainment, today announced that Compaq Computer Corporation (NYSE: CPQ) will offer the Creative Dxr(TM)3 Decoder board as a standard upgrade for Compaq's commercial line of Deskpro PCs and Professional Workstations. The Dxr3 decoder board is the latest offering in Creative's award winning line of PC-DVD Encore solutions. The Dxr3 decoder board delivers impeccable image quality and provides enhanced processing of color video at high resolutions on the PC or TV.The Creative Dxr3 Decoder board features DynamicXtended Resolutionô (Dxr3) picture enhancement technology for playback of high-definition video with sharper full-screen video PC images. Dxr3's advanced architecture elevates video quality to the next level. Key features include 6-tap filtering and scaling techniques virtually eliminating ""combing"" effects that may appear around moving objects to deliver sharp, clean video images. Creative's hardware-based DVD/Dolby decoder works on a PentiumÆ 166 MHz PC, provides greater clarity over other MPEG-2 decoders and is more efficient than software-based DVD decoders.""Creative's award-winning Dxr3 picture-enhancement technology creates superior visual quality on PCs,"" said John Troutman, Vice President and General Manager of Creative Labs, Malvern. ""The Creative Dxr3 Decoder card will allow Compaq's commercial PC users an opportunity to experience state-of-the-art high definition video.""""Corporate customers are increasingly demanding the latest DVD technology and MPEG playback for applications such as video training,"" stated Naila Seif, Director of Product Marketing, Desktop PC Division at Compaq. ""With the Dxr3 Decoder card and Compaq's 10X DVD-ROM or 6X Slimline DVD-ROM products, Compaq now provides a leading-edge DVD solution to meet our customers' evolving performance requirements. Compaq and Creative Labs bring together technological leadership for a total customer solution.""Additional Features And Benefits- Dxr3 Picture Enhancement - With resolutions up to 1600x1200 and advanced imaging techniques, the Dxr3 card produces unimaginably sharp images on the PC;- Graphics Adapter Technology - Dxr3 works with the graphics adapter to eliminate the need to adjust the PC monitor's resolution when watching movies on the PC;- Dolby Digital Audio Component - Listen to cinema-like Dolby Digital audio by connecting to the Cambridge SoundWorks DeskTop Theater 5.1 speaker system or a Dolby Digital amplifier/receiver;- Advanced Video Color Processing - Color video processor fully utilizes the on-board 24-bit DAC for sharper images and crystal clear displays.About Creative's OEM Business DivisionCreative's OEM Business Division is dedicated to providing customized service and support for OEMs. The OEM Business Division is focused on designing solutions that target the PC, portable and imbedded solutions markets. Creative recognizes that OEMs increasingly rely on brand name solutions in order to differentiate in today's highly competitive PC market. Creative is able to offer OEMs its strong brand name and industry standard solutions that have come to be associated with the high-quality and reliability that consumers demand. Creative's OEM Business Division utilizes resources and advanced technology in audio, speakers, graphics, communications and PC-DVD from its wholly-owned subsidiaries - Emu Systems, EcTiva, Cambridge SoundWorks, Digicom Systems and Silicon Engineering, Inc. - to produce a broad range of cost-effective solutions that provide OEMs with a competitive advantage.About CreativeCreative Technology Ltd. develops, manufactures and markets a wide array of advanced multimedia solutions for the PC, entertainment, education, music and productivity tools markets. Creative's products are marketed through both the OEM and retail channels under a variety of trademarks, including the ""Blaster"" family name. Sound Blaster(R) has become the multimedia industry's de facto audio standard. Sound Blaster is an audio platform consisting of a sound card or chipset, software drivers and bundled software applications that enable PCs to produce high quality audio. Creative's corporate headquarters and primary manufacturing are based in Singapore, with sales, distribution and research and development being carried out through an extensive, global network of subsidiaries located in North America, Europe, Asia and Africa.

For more information on Creative's entire line of multimedia solutions for the PC, visit the Web site at www.creative.com or contact Phil O'Shaughnessy of Creative Labs, Inc., 408 546 6773, poshaughnessy@creativelabs.com.