DIAMOND MULTIMEDIA'S VIPER ACCELERATOR USHERS IN A NEW CLASS OF 'NO-COMPROMISE' 2D/3D MEDIA ACCELERATORS FOR WORK AND PLAY ON THE PC

Diamond Viper's "True" 128-Bit Processing Power Merges Fast 2D Graphics, Advanced 3D Gaming and Sharp Digital Video

SAN JOSE, Calif. -- August 26, 1997 -- Diamond Multimedia Systems, Inc. (Nasdaq: DIMD), a leader in Internet multimedia acceleration, today announced the Viper®, model V330, a "true" 128-bit media accelerator. The new Viper will be the company's most powerful integrated mainstream graphics and multimedia solution, optimized for both business users and gamers alike. Featuring NVIDIA Corp.'s innovative RIVA 128® media controller, the Viper offers excellent 2D, 3D and digital video playback performance. With an estimated retail price of $199.95, Diamond's Viper, including an extensive software bundle, will begin shipping this month to select distributors with widespread distribution in September.

Populated with 4MB of 100MHz SGRAM, Diamond's Viper is one of the first PC graphics solutions featuring an advanced 128-bit graphics engine coupled with a full 128-bit data path to memory. This "fast and wide" architecture is ideal for accelerating computers running both power-intensive business applications and games on the Windows 95 and Windows NT operating systems. Diamond's new accelerator provides an outstanding combination of high-performance 2D and arcade-quality 3D acceleration, performing all major 3D functions in hardware, resulting in better quality images and faster PC system performance. Additionally, the Diamond Viper delivers outstanding performance for applications based on Microsoft's Direct3D application programming interface (API).

Diamond's Viper also provides a complete platform by offering advanced multimedia features, including TV-output capability, full-screen MPEG-1 video playback and multi-monitor support. Plus, the Viper is upgradeable to DVD and allows television viewing and video capturing via an optional Diamond TV-tuner/capture card.

"Our engineering team has focused their efforts on creating a fully integrated multimedia solution that stands apart from the competition," said David Watkins, vice president and general manager for the multimedia division at Diamond Multimedia. "In addition to providing advanced video features, the new Diamond Viper combines the 2D graphics performance of our award-winning Stealth series with the 3D gaming muscle of our popular Monster 3D. The horsepower of the new Viper will provide both business professionals and gamers with a new level of performance, making Viper a 'must have' this fall."

Tuned for High-Performance
In Diamond Multimedia's preliminary independent benchmark testing using Ziff Davis' 2D and 3D WinBenchTM 97 test suite, the Viper topped-the-charts with outstanding results. In 2D testing, Diamond's Viper earned scores of 140 million WinMarks for Windows 95 and 130 million WinMarks for Windows NT. In 3D testing, the Viper yielded a high-score of more than 225 3D WinMarks. 3D performance of this caliber was previously available with dedicated Direct 3D accelerators only. These results underscore the Diamond Viper's best-of-class performance status over other competitive solutions.

Maximized 2D/3D Graphics Processing Power for Business
By off-loading intensive processing from the host CPU, Diamond's Viper accelerator allows the PC to perform many complicated 2D and 3D multimedia functions in tandem without slowing down overall system performance. This critical feature provides PCs with the necessary horsepower to run today's advanced 2D/3D intensive business, productivity and Internet applications. Until now, other 128-bit solutions have cost as much as $500.

"NVIDIA is excited that Diamond Multimedia has chosen to feature the RIVA 128 graphics engine with its new Viper media accelerator," said Jen-Hsun Huang, NVIDIA president and CEO. "Our advanced 3D multimedia ASIC coupled with Diamond's award-winning subsystem design, software driver expertise and worldwide brand recognition will make the Viper a top choice for consumers with advanced computing needs."

Enhancing overall system and application performance, Diamond's new Viper accelerator is capable of displaying resolutions up to 1600 x 1200 and color depths up to 32-bit true color. An impressive 230 MHz RAMDAC enables flicker-free refresh rates (maximum 200Hz) for optimum display quality. In addition, Diamond's Viper supports a VESA standard 85Hz refresh rate with resolutions from 640 x 480 to 1600 x 1200 for monitors ranging from 14 to 21 inches.

Plus, Diamond's Viper includes reliable, optimized drivers for today's most popular operating systems, including Windows 95 and Windows NT 4.0, and accelerates Direct3D and OpenGL for games and graphics design. Drivers for Memphis (Windows 98) are planned.

Providing a tremendous boost to work productivity, Diamond's Viper lets users of Windows NT 4.0 greatly expand their PC desktop real-estate with multi-monitor support. This feature enables the display of spreadsheets, graphs, drawings and more across as many as four PC screens. A separate Viper accelerator is required for each monitor.

Fast-Action, Realistic 3D for Dedicated Gamers
Diamond's Viper delivers state-of-the-art 3D functionality for ultra-smooth rendering of animated images and cinema-quality special effects without compromising 2D speed. Diamond's new accelerator is a full-featured 3D solution that optimizes system performance for all games, multimedia applications and business productivity titles developed using Microsoft's Direct3D APIs, the de-facto standard for software development. It was specifically designed to execute all major 3D functions (see attachment), including an impressive hardware triangle setup engine for hyper-speed processing of graphics-intensive sequences in real-time.

"Microsoft is pleased to see a graphics accelerator solution like Diamond Multimedia's new Viper that can truly take advantage of DirectX 5.0-based software applications," said Kevin Dallas, group product manager of DirectX for Microsoft Corporation. "Equipped with NVIDIA's RIVA 128-based engine, Diamond's accelerator is an excellent upgrade choice for consumers who want to enhance their productivity with Microsoft Office 97, experience the best of the Internet with Microsoft Internet Explorer 4.0, play the hottest DirectX-based games, and more."

Advanced Digital Video Capabilities
Diamond's Viper provides powerful full-motion digital video playback, with frame rates as high as 30 frames per second while maintaining crystal-clear resolution. The accelerator combines key hardware-based video functions, including enhanced support for DirectDraw and DirectVideo in Windows 95, image scaling, color space conversion and filtering. These advanced features enable users to enjoy broadcast-quality video when viewing streaming video sequences over the Internet; playing the latest video-rich computer games; learning today's newest business applications from video-based training modules and more. Diamond's Viper also takes video playback to a new level of quality with multi-tap X and Y scaling capability, a special filter that makes video appearance clearer.

Diamond's Viper also comes with TV-out capability for viewing PC graphics, including business multimedia presentations, games and DVD-based movies, using their TV screen.

Next-Generation Multimedia Platform
In addition to its advanced video features, the Diamond Viper delivers a complete multimedia solution through a variety of integrated multimedia add-ons. These include an optional Diamond TV tuner/capture option. Additionally, the Diamond Viper is upgradeable to DVD solutions incorporating MPEG-2 and AC-3 hardware. And, the new Viper can be used in conjunction with Diamond's Maximum DVD Kit featuring a Diamond DVD adapter, a Toshiba DVD-ROM drive and a variety of software titles.

Awesome Software and Utilities Bundle
Diamond's Viper accelerator comes bundled with an impressive selection of both games and business productivity software, including the full-version of Interactive Magic's iF-22TM The Realistic Simulation of the F-22 Raptor, as well as Playmate Interactive Entertainment's MDK: Mission Laguna BeachTM, BMG Interactive's Moto Racer, MGI's PhotoSuiteTM SE, MediaMatic's MPEG Arcade Player, Microsoft's Internet Explorer and Backweb Software. Providing enhanced acceleration for the growing number of Direct3D-enabled Internet VRML and 3D business programs, Diamond's Viper lets users design stunning 3D graphics quickly and easily by using the bundled Asymetrix Web 3DTM software. Also included is VREAM's VRCreator VRML development software.

Purchasers of Viper also receive the newly enhanced-version of Diamond's InControl Tools 95 desktop utility software, enabling users to make on-the-fly adjustments for display resolution and color depth. Diamond's InControl Tools 95 also provides special utilities, including real-time screen centering, customizable gamma-settings and online product support. Plus, an integrated Windows 95 wizard walks users through product installation and setup and lets them launch the Windows 95 start menu from any screen on their PC desktop. Also provided is a new release of Diamond InControl Tools for Windows NT which includes features such as multi-monitor support, hotkeys, and more.

Multiple Configurations
In addition to the retail product, the new Viper will also be available in both PCI and AGP configurations for OEM, VAR and systems integrator customers.

Diamond's Media Accelerator Lines
In addition to its high-performance line of Viper accelerators, Diamond offers its award-winning Stealth line of affordable media accelerators with integrated, high performance graphics acceleration; its Fire GL line of advanced media accelerators for the professional graphics market; and its popular Monster 3D, a 3D-only graphics accelerator for computer gaming enthusiasts.

Diamond Multimedia
Diamond Multimedia is driving the Internet multimedia market by providing interactivity and connectivity solutions for home, business and professional desktop computer users, enabling them to create, access and experience compelling new media content from their desktops and through the Internet. Diamond accelerates multimedia from the Internet to the hard drive with products that include the Stealth and Viper series of media accelerators, the Monster series of entertainment 3D and sound accelerators, the Fire series of professional 3D and SCSI accelerators, and the Supra® series of modems. Diamond also markets DVD and video phone kits. Diamond's common stock is traded on the Nasdaq Stock Market under the symbol DIMD, and its web site address is www.diamondmm.com.

How to Contact Diamond Multimedia
There are many ways to reach Diamond for sales support, technical assistance, driver updates and general information:
Internet Web Site: http://www.diamondmm.com
Diamond Multimedia's Headquarters and Audio-Visual Systems Division: 408-325-7000; Fax: 408-325-7070
Communications Division (Supra brand modems) Main Phone Number: 360-604-1400; Fax: 360-604-1401
European Division (Germany): +49-8151-266-0; (UK): +44-1189-444400; (France) +33-1-47561157
Korean Office (Seoul): +82-2-551-2700; Fax: +82-2-551-2710
Japanese Office (Tokyo): +81-3-5695-8401; Fax: +81-3-5695-8403
ASEAN Office (Singapore): +65-353-9511; Fax: +65-353-9510
Hong Kong Office: +852-2375-9023; Fax: +852-2375-9021
Support Information Line for Communications: 1-800-774-4965
Product Support (Voice), Audio-Visual Systems: 408-325-7100; Communications: 541-967-2450; Europe (Germany) +49- 8151-266-330; Europe (UK) +44-1189-444444; ISDN Support Center 408-325-7110; Fire GL Support Center 408-325-7120; TDD/TTY Support 541-967-2451
Product Support (Fax), Audio-Visual Systems: 408-325-7171; Communications: 541-967-2401; Europe (Germany) +49- 8151-266-331; Europe (UK): +44-1189-444445; (France) +33-1-47561139
Pre-sales Information, Audio-Visual Systems: 1-800-468-5846; Communications: 1-800-727-8772
Investor Relations: 408-325-7476
24-Hour Fax-On-Demand Service, Audio-Visual Systems: 1-800-380-0030; Communications: 541-967-0072
FTP sites: ftp.diamondmm.com; or Supra: ftp.supra.com
BBS for Audio-Visual Systems 408-325-7080 (to 14.4 Kbps) or 408-325-7175 (to 28.8 Kbps) or 408-383-0551 (ISDN); Communications BBS: 541-967-2444; Europe (Germany) BBS at +49-8151-266333 (to 28.8 Kbps) or +49-8151-266334 (ISDN); Europe (UK) at +44-1189-444415 (to 33.6 Kbps)
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Monster 3D and Supra are either trademarks or registered trademarks of Diamond Multimedia Systems, Inc. Viper® is a Registered Trademark of Directed Electronics, Inc., Used under License. RIVA 128 is a trademark of NVIDIA Corporation and SGS-THOMPSON Microelectronics. WinBench is a trademark of Ziff-Davis, Inc. All other trademarks referenced are the service mark, trademark or registered trademark of their respective manufacturers. This announcement relates to products whose launch are in the United States of America. The product names contents, prices and availability may differ elsewhere in the world according to local factors and requirements.

Tests were performed under Windows 95 OSR2 using Intel Portland (440FX chipset) with Intel Pentium II 266 MHz with MMX CPU, 512K cache, 32MB EDO SDRAM and a 1.6GB IDE hard disk and under Windows NT 4.0 w/SP3 using Intel Portland (440FX chipset) with Intel Pentium II 266 MHz with MMX CPU, 512K cache, 64MB EDO DRAM and a 1.6GB hard disk. Scores based on in-house testing using Ziff-Davis' Winbench 97 Business Graphics at 1024x768x16bpp at 75Hz for 2D (Windows 95 and Windows NT 4.0) and Ziff-Davis' 3D Winbench 97 version 1.0 at 640x480x16bpp at 75Hz for 3D.

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.

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