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Nation's Top-selling PC Maker to be Third Partner in S3 Rio Audio Branding Program

Featuring S3's Rio Audio technology, the Dell Digital Audio Receiver (also announced today) allows consumers to enjoy CD-quality music stored on a PC in any room of the home by distributing audio to remote receivers or home stereo systems.

``This strategy is designed to capitalize on the strength of S3 in the digital music arena and Dell in the personal computer, Internet, and home networking arenas,'' said Greg Nakagawa, director of Dell's consumer Internet products and services. ``We believe this makes a great combination.''

``People listen to music in a lot of different ways, which is why you've seen us embrace partners like Dell, Nike and Boston Acoustics to address and meet those varying lifestyles,'' said Mike Reed, director of marketing for S3's Rio Group. ``These partnerships extend the Rio experience to a broader range of consumers and provide them with more choice.''

Rio Audio Branding Program

The Rio Audio branding program allows a select group of consumer product-focused companies to market digital audio devices with varying styles and forms, while still offering a consistent music experience. Based on extensive testing and user feedback, key elements of the Rio music experience include familiar user control and interface, edgy product style, superior sound quality, access to music industry supported formats, and compatibility with home-networked audio and software on the PC and Mac. Consumers who purchase these co-branded devices will enjoy a consistent experience through a variety of products. S3 previously announced that Boston Acoustics and Nike are partners in the Rio Audio branding program.

About S3 Incorporated

Following its acquisition of Diamond Multimedia and the transfer of its graphics chip assets to a 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 historical information contained herein, the matters set forth in this press release are forward-looking statements that are subject to risk and uncertainties, including the impact of competitive products and pricing and of alternative technological advances 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.

Contact:

     Investor Contact
     S3, Incorporated
     Tracy Perry, 408/588-8086
     ir@s3.com
           or
     Editorial Contact
     Porter Novelli Convergence Group
     Kelley McGrath, 206/727-2880
     kelley.mcgrath@pnicg.com