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Oak Introduces Industry's Most Integrated DVD Chipset
OTI-9820/OTI-2650 Two-Chip Solution Reduces OEM System Cost

and Time-to-Volume, while Raising the Bar on End-User

Experience and Audio/Video Quality

SUNNYVALE, Calif.--(BUSINESS WIRE)--April 3, 2000--Oak Technology (Nasdaq: OAKT), a leading provider of embedded software and semiconductor solutions for the Connected Office and optical storage markets, today announced the OTI-9820/OTI-2650 chipset, a complete system-on-a-chip (SOC) solution combining all major digital versatile disk (DVD) player functions on only two chips. The high integration and flexibility of the OTI-9820/OTI-2650 chipset will enable original equipment manufacturers (OEMs) to rapidly design and produce feature-rich, yet cost-effective DVD-players, thus driving the adoption of DVD video as a mainstream format worldwide.

"The OTI-9820/OTI-2650 chipset is the first of Oak's new line of DVD player products," said Young Sohn, CEO and president of Oak Technology. "Oak's core expertise in optical storage products, combined with our MPEG technology, puts us in a unique position to provide customers with a sophisticated, yet simple-to-implement, solution that will help them bring advanced DVD products to market quickly."

"Oak's OTI-9820/OTI-2650 integrated two-chip solution will help OEMs to drive system costs down substantially and will help DVD players become mainstream products," said Michelle Abraham, senior analyst with Cahners In-Stat Group (Scottsdale, Ariz.) "Now that DVD titles from all major studios have become widely available in both rental and sales, the major obstacle to DVD players reaching the mass market is the availability of low-cost players."

According to Cahners In-Stat Group, DVD player shipments will exceed 13.5 million units this year, which represents a 99-percent increase compared to 1999, and the average price of a player will reach $200 in the fourth quarter of 2000, a 32-percent reduction compared to last year. Some of the low-end products are even expected to drop below $130 by Christmas 2000 and break through the $100 barrier by the following holiday season.

A key to success in this market is the offering of a complete system solution, with a reference design that incorporates both a complete hardware platform with loader and a complete, yet modular, software implementation. This enables OEMs to come to market quickly with a differentiated product at the appropriate price point.

Another key area of differentiation for DVD players is the audio sub-system. To enable OEMs to capitalize on this fact, the Oak chipset supports on-chip decoding of Digital Theater Systems (DTS), High Definition Compatible Digital® (HDCD®) and MP3, as well as QSound Labs' three-dimensional (3D) sound technology, in addition to traditional features such as support for Moving Picture Experts Group (MPEG) and Dolby-DigitalTM standards.

"We are very pleased that Oak Technology has chosen to incorporate QSound's patented 3D audio technology into its new DVD chipset," said David Gallagher, president and CEO of QSound Labs, Inc. (Calgary, Alberta). "We believe this will provide Oak with an additional competitive advantage, while also benefiting consumers by offering them superior 3D audio quality in their DVD players."

"We're delighted that Oak has selected Pacific Microsonics' HDCD® for its new DVD player solution," said Alex Limberis, VP of engineering from Pacific Microsonics, Inc. (Union City, Calif.). "We expect that through its unprecedented degree of integration and the completeness of its reference design, Oak's solution will help promote HDCD® technology as the audio standard of choice worldwide," he added.

Product Features

The OTI-9820/OTI-2650 chipset incorporates all major DVD player functions on two chips -- a front-end chip for the DVD drive and a back-end chip for the DVD decoder, television encoder and system central processing unit (CPU). In addition, the chipset comes with a complete DVD-player reference design, including an optimized DVD loader and a modular system software package.

The software package combines a DVD navigator, user interface module, servo firmware and device drivers. Targeted also at the fast-emerging DVD Chinese market, the reference design likewise supports the popular video compact disk (VCD) and S-VCD standards, as well as karaoke functions.

The modular software approach used for the DVD player reference design, combined with the powerful OTI-2650 back-end engine (in excess of 250 million instructions per second, or MIPS, of on-chip computational power), provides for a highly flexible system solution. This enables OEMs to use the same basic architecture across their whole product range, from low-end to high-end players, and to quickly react to emerging new standards and features such as MP3 or progressive scan display.

In brief, the key features include:

   --  OTI-9820 - Integrated DVD/CD DSP, servo and block decoder with
        advanced error detection and correction schemes for improved

   --  OTI-2650 - Integrated DVD backend combines: MPEG-2 video
        decoder; 24-bit audio digital signal processor (DSP); 32-bit
        reduced-instruction-set-computer (RISC) system CPU; advanced
        32-bit on-screen display (OSD) with hardware 2D graphical user
        interface (GUI) acceleration for superior user-interface
        performance and quality; and PAL/NTSC video encoder with a
        progressive scan option for high-definition TV (HDTV)-ready
        systems. Major audio features include support for
        multi-channel MPEG, Dolby Digital and DTS, as well as HDCD®
        and MP3 decode, in addition to post processing functions such
        as karaoke and 3D sound.

Availability and Pricing

Sampling now in PQFP packages, the OTI-9820/OTI-2650 chipset is priced at $25 for volume quantities and will be in full production in fall 2000.

About Oak Technology

Founded in 1987, Oak Technology, Inc. provides complete product solutions worldwide to original equipment manufacturers (OEMs) that serve the global optical storage and digital imaging markets. Oak's Optical Storage Group is the leading merchant supplier of optical storage controllers for CD-R (Recordable), and CD-RW (ReWritable) drives worldwide. Since its founding, Oak has sold over 125 million optical storage controllers to leading optical storage OEMs, including Acer, LG Electronics, Mitsumi, Philips, Samsung, and Yamaha. Oak's Imaging Group develops innovative software and advanced compression and image processing solutions to drive the performance of advanced digital copiers, printers, faxes, scanners, and multifunctional peripherals (MFPs). Oak supplies imaging solutions to industry leading digital office equipment OEMs, including Canon, Epson, Fujitsu, Hewlett-Packard, IBM, Minolta, Ricoh, Sharp, and Xerox.

Oak has offices in California, Japan (Oak Technology K.K.); Taiwan (Oak Technology, Taiwan); Korea, Republic of China, Germany, San Diego, Idaho, and Andover & Burlington, Mass. (Oak's Imaging Group). Additional information about Oak Technology and its products can be found on the World Wide Web at

The foregoing statements may consist of forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. Factors that could cause actual outcome to differ materially from those set forth include, without limitation, the rate of growth of the optical storage markets, the Company's ability to execute on its products for the optical storage markets, competitive pricing actions and marketing programs, among others. For a discussion of such risks, see the Company's most recent SEC Forms 10-K and 10-Q.

Oak Technology and the Oak logo are registered trademarks of Oak Technology, Inc. All other product names or company names are mentioned for identification purposes only, and may be trademarks of their respective owners

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