Sunnyvale, Calif., August 17, 1998 - UMC Group, a worldwide leader in semiconductor foundry services and the first semiconductor foundry to implement 0.25-micron production, today announced full production shipping of S3 Incorporated's (Nasdaq: SIII) industry-leading 128-bit Savage3D accelerator chip using 0.25-micron process technology.

Upon release of the Savage3D design from S3, UMC Group produced masks and working silicon in less than 20 days—a record for 0.25 micron processing by both UMC Group and S3. The Savage 3D product was announced in May and mass production started in early July. Delivering winning 3D performance, state-of-the-art AGP throughput and video/DVD quality, the Savage3D accelerator is aimed at the high-end PC market and will be manufactured in high-volume by UMC Group's 0.25-micron USC fab.

"UMC Group's lead in deep sub-micron technologies, coupled with its manufacturing prowess, match S3's product objectives of price and performance while meeting high-volume market demand," stated Paul Franklin, senior vice president of operations for S3 Incorporated.

"UMC Group's leadership in process technology and fully integrated foundry services provides our customers and partners a competitive edge," said Jim Ballingall, vice president of worldwide marketing at UMC Group. "By reducing development cycles and accelerating time to market, we have become the entry point for the production of successful deep sub-micron designs."

S3 Incorporated, founded in 1989 with headquarters in Santa Clara, California, is a premier supplier of multimedia acceleration hardware and its associated software. S3 is committed to applying its expertise in graphics and video and platform acceleration to create innovative and affordable products for the home, desktop and mobile markets.

S3 is a registered trademark of S3 Incorporated. The S3 corporate logo, Savage3D and S3TC are trademarks of S3 Incorporated. Other marks referenced herein are the property of their respective owners.