Requirements Focus Will Include Joint Product Development for a Wide Range of Digital Media, Including Information Appliances

SUNNYVALE, Calif.--(BUSINESS WIRE)--May 2, 2000-- Oak Technology, Inc., a leading provider of embedded solutions for the optical-storage and digital-imaging markets, and LG Electronics Co., Ltd. (LGE, Seoul, Korea), the global optical-storage volume leader, today announced a strategic partnership aimed at creating leading-edge platform solutions for the optical-storage market, as well as the emerging information-appliance market.

Under the broad cooperative agreement, LGE and Oak will leverage each other's core strengths to continue their respective leadership in the optical-storage market and define new products for information appliances.

This agreement builds on the two companies' previously existing successful relationship, which focused on the integration of Oak's OTI-9790 rewritable compact disk (CD-RW) controller into LGE's line of 8x CD-RW drives. The new, broader relationship will encompass solutions that enable the convergence of CD recordable, digital versatile disk (DVD) recordable and compression technologies, which, in turn, will allow LGE to deliver content to the consumer through state-of-the-art digital media.

"Oak Technology and LGE agree that there is a strong push for both the PC and consumer markets to converge around applications that link the Internet and the consumer," said Young Sohn, Oak president and CEO. "We see recordable optical technologies as the essential enabling element driving the future of digital media applications for the PC and consumer markets. The synergy between LGE's commitment to being a systems leader in the delivery of content to the PC and consumer markets and Oak's expertise in optical recording and compression technologies creates a solid foundation for Oak and LGE to drive the information appliance market."

"The high level of integration and flexibility of Oak's optical and compression technology has convinced us to adopt Oak's entire optical product range," said Nam Woo, LGE senior executive vice president and president of LGE's Digital Media Company. "In the future, we will work together very closely to maximize time-to-market for identified products and define new products for emerging information appliances."

About LG Electronics

LGE is a leading supplier of digital media -- optical drives, DVD-players and other consumer electronics goods -- as well as digital displays and digital appliances, and is the vendor of choice for many of the leading consumer electronics OEMs and retail chains. With approximately 50,000 employees worldwide and 1999 total revenues of 10.5 trillion Won (US$9.4 billion), LGE is committed to the global proliferation of its easy-to-use "Digital LG" technology. More information about the company, its products and services may be obtained from the World Wide Web at www.lge.com.

About Oak Technology

Founded in 1987, Oak Technology, Inc. provides complete product solutions 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 multifunction 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 the United States (California, Idaho, Texas, and Massachusetts); Japan; Taiwan; Korea; Republic of China; and Germany. Additional information about Oak Technology and its products can be found on the World Wide Web at www.oaktech.com.

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 adoption of new technology, the rate of growth of the optical market, market acceptance of the products, 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.

Note to Editors: 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.