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A Leading Supplier of DVD Player DSPs Enables Licensing of Spatializer N-2-2 Ultra(TM) for Millions of DVD Player Products Worldwide

Spatializer VirtualSurround VBX(TM) Licensed for Domestic Chinese Market

"This new partnership creates a powerful relationship," says Spatializer's Chairman and CEO Henry R. Mandell. "With MediaTek's deep penetration in the DVD Player market and our strong portfolio of audio enhancements, this new alliance brings significant business opportunities to both companies."

"MediaTek is the world's leading provider of optical storage and digital consumer semiconductors and is now poised to be a leader in the MPEG-2 decoder market. We are pleased to have selected the most impressive virtual surround sound technology available today to offer to our prospective customers. We look forward to a long and successful relationship," says MK Tsai, Chairman, MediaTek, Inc.

The suite of next generation audio enhancement technology bundled in Spatializer N-2-2 Ultra once again raises the standard for superb audio quality and immersive surround sound performance and while providing unparalleled user control.

Spatializer N-2-2 Ultra takes advantage of the latest processor architecture to deliver outstanding performance and a world-beating feature set. By offering a wide array of features and options, Spatializer N-2-2 Ultra(TM) provides the branded OEM the opportunity to offer their customers a diverse package of audio enhancement features in a single cost effective solution. These features include:

    -- Spatializer N-2-2 TV(TM) a new algorithm specifically designed to
       enhance DVD sound quality when using built-in television speakers.
    -- Theater Speaker Placement Optimization allows the listener to optimize
       for various speaker locations based on their unique listening area
       layout.
    -- DVD Movie Dialogue Enhancement, unlike most virtual surround
       techniques, maintains the center channel positioning virtually,
       therefore ensuring that the movie dialog remains centered and clear in
       the newly widened virtual surround sound field.
    -- Spatializer Natural Headphone(TM) provides natural sounding surround
       effect over headphones.  A well-defined center image allows for crystal
       clear presentation of dialogue, while the other surround channels
       immerse the listener in a three dimensional audio experience.
    -- Spatializer PCE(TM) delivers high frequencies that are clearer, crisper
       and more brilliant and low frequencies that are more dramatic, tighter
       and have more impact.  Spatializer PCE gives the OEM an inexpensive way
       to dramatically improve the sound of small or frequency-response
       challenged loudspeakers, such as the kind often found in televisions or
       compact system set-ups.
    -- Spatializer VirtuaLFE(TM) processes the low frequency effects channel
       so that it can safely be included in the virtual surround down mix
       thereby delivering a virtual subwoofer to any TV.

About MediaTek

MediaTek Inc. is a leading provider of total solution for optical storage and digital consumer semiconductor. Founded in 1997 and headquartered at Hsin-Chu Science-Based Industrial Park, Taiwan, MediaTek is now one of the world's top 10 IC fabless companies and the world's largest chipset supplier of CD-ROM, DVD-ROM, CD-RW and DVD player. The Company's common stock is traded on the Taiwan Stock Exchange under the symbol "2454". For more information, please visit the Company's web site at www.mtk.com.tw .

About Spatializer

Spatializer Audio Laboratories Inc. is a leading developer, licensor and marketer of next-generation technologies for the consumer electronics, computing and entertainment industries. The company's advanced audio technology is incorporated into consumer electronics audio, video and DVD products from global brand leaders including Toshiba, JVC, Panasonic, Hitachi, Samsung, Sharp, SANYO, SONICblue, and Kenwood, in PC multimedia systems and peripherals from Apple and Labtec, in silicon from Matsushita, Texas Instruments, Cirrus Logic, New Japan Radio Corporation, Zoran, Motorola, LSI, Tvia, Genesis and Acer Laboratories Inc, and in MP3 players such as Sanyo and embedded with RISC cores from MIPS Technologies. Spatializer stock is traded on the OTC Bulletin Board under the symbol: SPAZ. The company is headquartered in Santa Clara, CA, with marketing offices in Tokyo, Japan. Further information may be obtained from the company's web site, www.spatializer.com , Spatializer's SEC filings, and by contacting the company's Investor Relations Department at 408-296-0600 or by writing to investor@spatializer.com.

Safe Harbor Act Statement Under the Private Securities Litigation Reform Act of 1995: Certain information in this press release, including the comments by Mr. Mandell in this press release are forward looking statements that are based on management's belief, as well as assumptions made by, and information currently available to management. While the company believes that its expectations are based upon reasonable assumptions, there can be no assurances that the company's financial goals will be realized. Numerous uncertainties and risk factors may affect the company's actual results and may cause results to differ materially from those expressed in forward-looking statements made by or on behalf of the company. These uncertainties and risk factors include, but are not limited to the continued need for additional capital, dependence on new technology and intellectual property, dependence on the PC and consumer electronics industries, dependence on product shipments of third-party licensees, competition and pricing pressures, and other risks detailed from time to time in the company's periodic reports filed with the Securities and Exchange Commission.

NOTE: Desper Products Inc. is a wholly owned subsidiary of Spatializer Audio Laboratories Inc. Spatializer® is a registered trademark and Spatializer N-2-2 Ultra.(TM), Spatializer N-2-2 TV(TM), Spatializer Natural Headphone(TM), Spatializer VirtuaLFE(TM), Spatializer VirtualSurround VBX(TM) and Spatializer PCE(TM) are trademarks of Desper Products Inc. All other trademarks are the property of their respective owners. Copyright (C) 2002 Spatializer Audio Laboratories, Inc.

SOURCE: Spatializer Audio Laboratories Inc.