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Acquisition Can Extend Leadership Into Additional Markets

SINGAPORE - March 11, 2002 - Creative Technology Ltd. (Nasdaq: CREAF), the worldwide leader in digital entertainment products for users of the personal computer and the Internet, today announced a definitive agreement under which Creative will acquire 3Dlabs Inc., Ltd. (Nasdaq: TDDD) for a combination of US$1.20 per share in cash and US$2.40 per share in Creative stock for each share of 3Dlabs.

On an approximate basis, Creative presently owns 1.8 million shares of 3Dlabs' currently issued share capital of 30.6 million shares. In addition, Creative owns warrants and convertible notes which, when exercised and converted, would provide an additional 9.4 million shares and give Creative an approximate 28% beneficial ownership of the then-total outstanding 3Dlabs shares. The cost to acquire those shares that Creative does not already own is estimated at US$34.6 million in cash and US$69.1 million of Creative stock for a total of US$103.7 million. These dollar amounts of Creative shares and cash are fixed; however, the number of Creative shares to be issued will be determined by the average closing sale price of Creative shares on the Nasdaq exchange over a ten-day period which will end five days prior to 3Dlabs' shareholder approval meeting. Based on Creative's closing price of US$13.10 per share as of Friday, March 8, 2002, this would represent approximately 5.3 million Creative shares to be issued. The total number of Creative shares issued to 3Dlabs' shareholders shall be subject to a cap of approximately 10 million Creative shares.

Completion of the transaction is subject to customary closing conditions, including approval by 3Dlabs' shareholder vote and regulatory and governmental approvals. Following completion of the transaction, 3Dlabs will become a wholly owned subsidiary of Creative.

"We have had a tremendous track record of choosing winning graphics technologies and partners over the years, and helping build them into #1 market share positions. We've helped those companies become very successful in the process," aid Sim Wong Hoo, Chairman and CEO of Creative. "As we have analyzed 3Dlabs' product lines, and most importantly their technology roadmap, we believe that their development of a scalable architecture and general purpose programmability will provide a significant competitive advantage in the graphics space."

Sim continued, "As power gamers' insatiable demand for higher performance graphics capabilities grows, we see great opportunities to expand 3Dlabs' leadership in the ultra high-end professional markets into our higher volume PC consumer desktop markets. The technological breakthroughs that 3Dlabs has achieved to date, most specifically in the design of their upcoming chipsets including the startling achievement of the world's first single chip TeraOps [trillion operations per second] visual processor with general purpose programmability, coupled with the strong market we see for high performance graphics accelerators, provide a tremendous growth opportunity for our company."

"Creative has developed, owns and markets the world's highest performance audio silicon technology," stated Sim. "With our announcement today, we will also own the world's highest performance graphics technology and a leadership position in the ultra high-end graphics space. For the first time, we will own substantial graphics intellectual property and a formidable graphics patent portfolio that will allow us to achieve a higher level of returns for our efforts as we re-emphasize the graphics category. This is a very different opportunity than when we were exclusively a graphics card provider that relied solely upon chips from other vendors. This enables us to pursue a business model that we believe has the potential for high margins like our audio businesses, while providing even more exciting opportunities for growth and enhancing shareholder value."

"We believe that this acquisition, with its many synergies and opportunities, can be accretive to our earnings in the first half of the next calendar year, excluding any charges related to the acquisition," said Sim.

"We are very excited about the opportunity provided by Creative's worldwide distribution network, huge customer base, world-famous brands, and financial resources to maximize the technology we produce," said Osman Kent, Chairman and CEO of 3Dlabs. "Integrating the resources and expertise of these two industry-leading companies can create a truly potent force in the graphics market."

Kent continued, "The timing of this acquisition is fortuitous, as we are close to releasing the most exciting high performance graphics lineup in our history. We have experienced a difficult financial period during which we continued to devote significant resources to the development of our breakthrough technologies. Creative can provide us the resources and opportunity to expand our leadership position beyond the ultra high-end graphics market. We can leverage Creative's vast experience at building global brands and market share to take full advantage of the market potential for our upcoming release of an exciting new family of graphics processors."

Creative will host a Q & A session for analysts to discuss this transaction on Monday, March 11, 2002 at 12:00 noon at Creative's headquarters in Singapore. (This is Sunday, March 10, 2002 at 8:00 PM U.S. Pacific time.) This session will also be webcast, with a link available to all investors from Creative's Investor Relations web site at A recording of the webcast will remain available at the same site for one week after the session.

About Creative

Creative (Nasdaq: CREAF) is the worldwide leader in digital entertainment products for users of personal computers and the Internet. Famous for its Sound Blaster® sound cards and for launching the multimedia revolution, Creative is now driving digital entertainment on the PC platform with products like its highly acclaimed NOMAD® Jukebox. Creative's innovative hardware, proprietary technology, applications and services leverage the Internet, enabling consumers to experience high-quality digital entertainment -- anytime, anywhere.

About 3Dlabs

3Dlabs is the workstation graphics authority, supplying graphics accelerator solutions for professionals in Computer Aided Design (CAD), Digital Content Creation (DCC), and visual simulation markets. Its award-winning Oxygen and Wildcat graphics are available in the industry's top OEM workstations, to the channel through an international distributor/reseller network, and directly to end-users at 3Dlabs' online store.

Sound Blaster is a registered trademark and Live!, Audigy and Extigy are trademarks of Creative Technology Ltd. in the United States and other countries. NOMAD is a registered trademark of Aonix and is used by Creative Technology Ltd. and/or its affiliates under license in the United States and/or other countries. 3Dlabs, Oxygen, Intense3D, Wildcat ,GLINT and Permedia are trademarks or registered trademarks of 3Dlabs Ltd., 3Dlabs Inc. Ltd., or 3Dlabs Inc. in the United States and/or other countries. All other brand and product names are either trademarks or registered trademarks of their respective holder and are hereby recognized as such.

Safe Harbor for Forward-Looking Statements Under The Private Securities Litigation Reform Act of 1995:

Except for the historical information contained herein and in the corresponding analyst briefing webcast, the matters set forth herein and in the corresponding webcast are forward-looking statements within the meaning of the "safe harbor" provisions of The Private Securities Litigation Reform Act of 1995. These forward-looking statements, including statements about the accretive nature of the acquisition, are subject to certain assumptions,risks and uncertainties that could cause actual results to differ materially from those projected as a result of a number of factors, including, among others: the transaction may not close or that the companies may be required to modify aspects of the transaction to achieve regulatory approval; the technology, including the new chip, may not be as robust as expected or may not achieve the expected performance, features or yield; fierce competitive actions will be taken against Creative as Creative re-emphasizes its graphics category, including potential anti-competitive acts or lawsuits alleging intellectual property infringement; discontinuation of the supply of graphics chips from certain suppliers thereby causing a reduction of Creative's projected revenue streams from its existing graphics businesses; the possibility that 3Dlabs' intellectual property, including its patent portfolio, is not as valuable as expected; the expected accretive results will not be achieved, and revenues and margins from the graphics category will not be increased; failure to achieve the anticipated synergies; failure to effectively manage the expenses resulting from acquiring 3Dlabs; failure of the newly acquired technology to penetrate new market segments in a timely fashion, if at all, particularly the high-end graphics and the OEM markets; failure to retain 3Dlabs' existing employees; the negative impact of the continued downturn of the global stock market and overall reduction in demand for computer systems, peripherals and related products in general and Creative's products specifically, including existing and new products acquired by the transaction; and other risk factors described herein and in Creative's other filings with the Securities and Exchange Commission over the past twelve months, including without limitation, Creative's Form 20-F dated October 10, 2001. Creative urges you to consider all such factors. Creative undertakes no obligation to publicly release the results of any revisions to such forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.