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When paired with Creative Technology Ltd.'s PC-DVD Encore 5X, or PC-DVD Encore Dxr2, the combination creates an unmatched home theater entertainment experience on the PC. Zoran's ZR38600 Dolby Digital surround sound decoder IC is central to delivering these dynamic capabilities. DeskTop Theater 5.1 delivers accurate, realistic surround sound effects, regardless of room acoustics or listener position.

The system can produce surround sound effects even with mono or stereo audio sources that are not encoded for surround sound, increasing PC users' enjoyment of games, music and movies.

``DeskTop Theater 5.1 is the first widely available complete Dolby Digital surround sound system for PCs,'' said Tom Hannaher, vice president of Marketing at Cambridge Soundworks. ``Zoran's highly integrated audio decoder offers the highest Dolby Digital decoding performance and the most complete feature set, helping us to bring this unprecedented integration of capabilities at an unbeatable price to PC users everywhere.''

The ZR38600, Zoran's third generation audio decoder IC, enables the DeskTop Theater 5.1 to provide true 5.1 channel Digital Surround Sound from Dolby Digital S/PDIF (Sony/Philips Digital Interface) sources. The Cambridge SoundWorks product mixes several audio sources to achieve the final effect.

``Zoran is happy to have helped Cambridge SoundWorks bring this exciting system to the market,'' said Paul Goldberg, vice president of Audio Products at Zoran Corporation. ``The flexible architecture of our third generation Digital Audio Processor gives DeskTop Theater 5.1 users true Dolby Digital surround sound at a mass market price in time for the holidays.''

About the ZR38600

The Zoran ZR38600 is a true third generation Digital Audio Processor. Developed in conjunction with Dolby Laboratories, it is the ideal solution for a wide array of digital audio processing tasks. In addition to Dolby Digital, Pro Logic, and audio data stream identification, these include, Virtual Surround processing, sophisticated Sample Rate System™ music modes, THX® processing, and bass management.

In the case of Virtual Surround processing, algorithms from seven separate suppliers have been ported to the ZR38600 platform and, because of the DSP processing power of the ZR38600, they can all be executed simultaneously with Dolby Digital decoding.

About Cambridge SoundWorks

Cambridge SoundWorks, a subsidiary of Creative Technology Ltd., manufactures 39 different models of home stereo, car stereo, home theater and computer speakers. It is the country's first and largest factory-direct stereo company, selling its stereo speaker products and sound systems in its 26 retail stores in Massachusetts, New Hampshire, Maine, Connecticut and California. Its speakers and sound systems are also offered directly to the consumer through its national catalog.

About Creative Technology Ltd.

Creative Technology Ltd. develops, manufactures and markets a wide array of advanced multimedia solutions for the PC, entertainment, education, music and productivity tools markets. The company's products are marketed through both the original equipment manufacturers and retail channels under a variety of trademarks, including the ``Blaster'' family name.

Sound Blaster has become the multimedia industry's de facto audio standard. Creative's corporate headquarters and primary manufacturing are based in Singapore, with sales, distribution and research and development being carried out through an extensive, global network of subsidiaries located in North America, Europe, Asia and Africa.

About Zoran

Zoran Corporation develops and markets software, integrated circuits (IC's) and IC Intellectual Property (IP) cores for digital audio and video applications enabled by compression. Zoran also provides complete reference designs based on Zoran's technology. Zoran's product lines and IP include JPEG codecs, MPEG and DVD decoders, digital audio processors and real-time DVD software for PC's.

All these standard-based products benefit from Zoran's Standard Plus™ technology. Zoran's software is bundled by PC and graphics-card manufacturers for software and software assisted DVD playback on PCs. The company's ICs are used in numerous digital audio and video products.

Leading applications incorporating Zoran's products and IP include professional and consumer video editing systems, filmless digital cameras, stand alone DVD players and PC-based systems, digital speakers and audio systems.

Zoran is headquartered in Santa Clara, with additional operations in Haifa, Israel, Toronto, and offices in Tokyo and Shenzhen, China. For more information about Zoran call 408/919-4111, or visit our website: www.zoran.com. For our latest press releases please call our fax-on-demand service at 800/PRO-INFO, ticker symbol ZRAN.

Note to Editors: Standard Plus™ is a trademark of Zoran Corporation. DeskTop™ Theater 5.1 is a trademark of Cambridge SoundWorks. PC-DVD Encore 5X, and PC-DVD Encore Dxr2 are trademarks of Creative Technology Ltd. Dolby Digital and Dolby Pro Logic are trademarks of Dolby Laboratories. All other trademarks are the property of their owners.

Contact:

     Zoran Corp.

     Yizhar Ganor, 408/919-4286

     ir@zoran.com

     www.zoran.com

     or

     The Financial Relations Board

     Cathy Roberts (Investors)/

     Alicia Nieva-Woodgate (Media), 415/986-1591