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Each product is recognized for its innovation, usability and functionality. According to ZDNet, products given this award ``are blazing the technological trail, are forward-looking technologies that we're impressed with today -- and we will take for granted tomorrow.''

``We honored the Rio Receiver with our Tech Trendsetter award for its innovation in moving digital audio beyond the PC,'' said Dan Farber, editor-in-chief, ZDNet. ``Each winner demonstrated forward-looking technology that raises the standards for the industry.''

The Rio Receiver is a device enabling consumers to stream CD-quality music from a PC to any room in the house. The receiver works with existing phone lines to distribute the digital music collections beyond the home computer. To date, consumers have only had access to portable players as a way to hear their digital music beyond the PC. Now, consumers can play digital music selections in any room where a Rio Receiver is placed. With multiple receivers, various digital music selections can be sent to different locations simultaneously. Music can be streamed to each Rio Receiver by scrolling and searching stored music collections via controls on the unit, or by using the receiver's remote control. The Rio Receiver will be available later this summer for an estimated retail price of $299 with an internal PCI card or without for $249.

``The Rio Receiver is easy to use and offers consumers the freedom to listen to their music anywhere in the home,'' said Mike Reed, vice president of marketing for S3's Rio Division. ``We're honored to receive the ZDNet's Tech Trendsetter award and the industry's recognition of this new digital audio device.''

The ZDNet Tech Trendsetter award was also awarded to Dell for its Digital Audio Receiver, which features S3's Rio Audio technology.

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 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 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:

     Porter Novelli Convergence Group
     Kelley McGrath, 206/727-2880
     kelley.mcgrath@pnicg.com