Singapore - 12 August, 1996; Creative Technology (NASDAQ:CREAF) today announced that they have begun co-development efforts with Samsung Electronics Co. Ltd., in a strategic alliance that covers the co-development and manufacturing of CD-ROM drive products, all of which is designed to better address recent market conditions.

The alliance will enable both Creative and Samsung to leverage each other's unique strengths in furthering the leadership of both companies in today's highly dynamic CD-ROM drive market. The two companies will work together in a joint development effort to build CD-ROM drives that incorporate unique features designed to further enhance its performance in multimedia applications.

"Samsung Electronics' alliance with Creative Technology in this distinctive strategic partnership offers both companies with broad opportunities to integrate top-notch technology and to develop differentiated product lines that expand our market reach through our combined channels," said Mr Y.H. Han, director of Samsung Electronics Co. Ltd, South Korea.

Mr W.H. Sim, chairman/CEO of Creative Technology adds, "As the information technology industry goes through turbulent times, Creative is forging ahead with new business models that offer Creative and its suppliers win-win opportunities. One prime example will be this unique alliance where Creative and Samsung have broken new ground and structured a winning combination of the latest technology, marketing prowess and strong channel presence. We believe this will enable us to meet time-to-market demands for high quality, low cost multimedia products."

The key terms of the agreement are as follows:
Co-Development
Samsung and Creative's co-development effort for CD-ROM drive products will leverage on Creative's extensive R&D and marketing experience in the multimedia upgrade market. The drive products will demonstrate improved performance to meet today's highly-demanding requirements of advanced multimedia applications. In addition, the new drives will feature unique enhancements that will offer more user-friendly integration of the drives in today's multimedia PCs.

Manufacturing
Samsung will be the key manufacturer of the newly co-developed products. Utilising Samsung's experience and in depth expertise in consumer manufacturing, this arrangement will ensure high quality and time-to-market delivery, thus enabling both companies to respond to market situations quickly.

Company's Background
Samsung Electronics Co., Ltd. is a leading producer of a diverse array of products including audio and video equipment, consumer electronics, computers and software products, monitors, peripheral, information systems, telecommunications systems and semiconductors. With its headquarters in Seoul, South Korea, Samsung Electronics is also the world's largest producer of DRAM computer memory chips.

Creative Technology Ltd. is the world's leading provider of advanced multimedia solutions for personal computers, including sound, graphics, communications and video conferencing products. The company's Sound Blaster© technology has been accepted as the worldwide standard sound platform for PCs, and the company's global distribution network is the most extensive in the multimedia industry. Creative is focused on enhancing the overall user experience by providing powerful, enabling, high-value technology for the mass market.