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"With the new VAIO machines, Sony becomes the first manufacturer to design our award-winning Vortex2 audio processors directly onto a PC motherboard," said Kip Kokinakis, President and CEO of Aureal. "Sony is a recognized leader in the technology and entertainment industries, and we believe this decision shows their continued strong commitment to enabling customers with the best multimedia technologies available."

Sony's VAIO Digital Studio computers allow users to experiment with and create high-quality audio and video in ways never before possible. By importing and editing video clips from their camcorders, and adding titles, transitions and soundtracks, users can output audio and video to create their own multimedia productions.  The machines come fully loaded with a complete suite of versatile audio-visual production tools.

About Vortex

The Vortex audio processor is a high-performance PCI audio chip designed to dramatically raise the quality level of PC audio by delivering advanced features including positional 3D audio, pro-quality wave table music synthesis, DirectSound acceleration and telephony support  while maintaining full support for existing DOS legacy audio functions. It also has the unique ability to interface to existing ISA telephony/modem solutions, thus allowing OEMs to eliminate the need for an ISA bus in their systems.

Many audio product vendors  including Diamond Multimedia Systems, Voyetra Turtle Beach, and Xitel  and top-tier PC manufacturers   including Sony Electronics, Compaq Computer Corporation, and Dell Computer Corporation  offer Aureal audio solutions to their customers via A3D and/or Aureal’s Vortex audio chips.

About Aureal Semiconductor

Aureal is a leading provider of advanced audio solutions for the computer, consumer, entertainment and professional audio markets. The company designs, builds and distributes advanced audio semiconductor and software solutions for personal computers and consumer electronics devices through the OEM, integrator/reseller/VAR and direct-to-customer channels. Aureal also licenses technology designed to define and improve advanced audio standards in the marketplace.

Leading industry partners include Sony Electronics, Compaq Computer Corporation, Dell Computer Corporation, and Diamond Multimedia Systems.  Aureal’s award-winning product line includes A3D positional audio technology, Vortex audio processors and Vortex-based sound cards, and A3D Pro sound design software. For more information on Aureal Semiconductor or its products and industry leading audio technologies, please visit our Websites at www.aureal.com and www.a3d.com.

Forward-Looking Statements

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995.  Investors are cautioned that such forward-looking statements involve risks and uncertainties including, but not limited to, dependence on the PC and consumer electronics industries and on product lines based on new technologies; foundry capacity, availability and reliability; 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.