New Stealth and SpeedStar Offerings Provide Optimal

Price/Performance Graphics Solutions

Diamond Multimedia Systems, Inc. (Nasdaq: DIMD), a leader in PC multimedia and Internet connectivity, today announced shipment of the company’s newest value-priced graphics accelerators: the Stealth III S540 Xtreme and SpeedStar A90. Powered by S3 Incorporated’s (Nasdaq:SIII) Savage4 accelerators, the Stealth III S540 Xtreme features stunning 3D gaming and DVD performance with 32MB of memory for $99.00 U.S. (estimated retail price based on a $30.00 rebate), while the SpeedStar A90 graphics accelerator offers a lower-cost, feature-rich graphics solution for system integrators and OEMs .

Diamond’s Stealth III S540 Xtreme

Delivering high-performance for graphics intensive business and computer gaming applications, Diamond’s Stealth III S540 Xtreme is equipped with 128-bit processing, 166Mhz memory and 160Mhz engine clocks, 32 MB of system memory, S3 texture compression (S3TC) and support for textures up to 2048×2048. The Stealth III S540 Xtreme also features single-pass multi texturing, 32-bit rendering, AGP 4X compatibility and hardware accelerated DVD playback.

“It’s unbelievable performance for the price!” said Scott Vouri, vice president and general manager of the Multimedia Division at Diamond. “We are shipping possibly the first high-performing graphics accelerator that has amazing resolution capabilities and clockspeeds and is priced below $100.00. The features of the Stealth III S540 Xtreme unify the compelling advantages of S3’s chip and Diamond’s board technologies and emphasize that PC consumers do not have to sacrifice quality graphics enhancements for value-sensitive pricing.”

SpeedStar A90 Now Available To System Integrators and OEM’s

Also announced today is the shipment of Diamond Multimedia’s Speedstar A90 graphics accelerator. The next generation of the successful SpeedStar series, Diamond’s SpeedStar A90, offers higher performance and more functionality than its SpeedStar A50 predecessor. Based on the S3 Savage4 PRO+ chipset, the SpeedStar A90 integrates 16MB of 125MHz SDRAM memory, 128-bit processing, complete AGP 4X support and optimal video playback, providing a truly low-cost solution designed for system integrators and OEMs.

About Diamond Multimedia

Diamond Multimedia is a leader in PC multimedia and Internet connectivity, providing advanced products that enable desktop computer users to create, access and experience compelling new media content from their PC’s and through the Internet. Products include the Rio series of Internet audio appliances, the Stealth and Viper(R) series of video accelerators, the Monster series of 3D gaming accelerators, the Fire series of professional graphics accelerators, the Supra(R) series of modems, and the HomeFree line of home networking products. Diamond’s common stock is traded on the NASDAQ under the symbol DIMD.
How to Contact Diamond Multimedia

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HomeFree, Monster 3D, Rio, Shotgun, SpeedStar and SupraSonic are either trademarks or registered trademarks of Diamond Multimedia Systems, Inc. Monster(R) is a registered trademark of Monster Cable. Viper(R) is a registered trademark of Directed Electronics, Inc., used under License. All other trademarks referenced are the service mark, trademark or registered trademark of their respective manufacturers. This announcement relates to products whose introductions are in North America. The product name, contents, prices and availability may differ elsewhere in the world according to local factors and requirements.Except for historical information contained herein, the matters set forth in this press release, such as statements relating to the Company’s ability to successfully exploit technological and market developments, the timing and success of new product introductions by the Company and its competitors, and the Company’s ability to invest in new technologies and to enhance its existing systems are forward-looking statements that are subject to risks and uncertainties, including the impact of competitive products and pricing and alternative technological advances, the timely and successful development and market acceptance of new products and upgrades to existing products, and other risks as detailed from time to time in Diamond Multimedia’s SEC filings, including its most recent Forms 10-K and 10-Q.