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CREATIVE TECHNOLOGY REPORTS RECORD EARNINGS OF $1.01 PER SHARE FOR Q3 FY2000

Strong operating income contributes 21 cents per share resulting from higher than expected revenues and strong margins, with 80 cents per share from investments

SINGAPORE - April 27, 2000 - Creative Technology Ltd. (NASDAQ: CREAF), the leading provider of Personal Digital Entertainment (PDE) solutions, today announced financial results for the third quarter of fiscal year 2000, ended March 31, 2000. All financial results are stated in U.S. dollars.

Sales for the third quarter were higher than expected at $330.0 million, driven by strong demand for audio systems, including speakers. This compares to $313.7 million for the same quarter last year. Net income was $88.3 million dollars and earnings per share were $1.01 including investment gains of $0.80 per share. This compares to net income of $18.3 million and earnings per share of $0.20 for the same quarter last year.

Sales for the first nine months of fiscal 2000 were $1.036 billion, compared to $1.021 billion for the same period last year. Net income for the first nine months of fiscal 2000, including investment gains of $84.2 million, was $143.6 million or $1.66 per share. This compares to net income, including investment gains of $2.5 million, of $100.3 million or $1.07 per share for the same period last year.

"Our revenues, which were a record for fiscal Q3, reflect that Creative is performing strongly in all areas -- products, regions, and business units," said Craig McHugh, president of Creative Labs, Inc. "Audio systems, including speakers, accounted for half of our total revenues, posting fifty percent year-over-year gains for the category in the quarter, which helped drive our gross margin to its highest level in eight quarters. Comparative operating results were particularly strong considering that this quarter's operating expenses included $11 million for our Internet initiatives."

"Creative's vision of building a vibrant, multi-faceted, clicks-and-mortar company around a solid and profitable core is now yielding tangible results, " said Sim Wong Hoo, Chairman and CEO of Creative Technology Ltd. "And being able to fully execute on our Internet initiatives and venture strategies, while achieving record revenues from our traditional businesses, including PDE Internet appliances, validates this vision."

"Since our last call, our board of directors approved doubling our value-added venture fund to a total of $200 million and, during this quarter, we invested an additional $86 million, bringing the total investment by the fund to over $150 million with holdings in over 30 public and private investee companies. Our strategy of investing in broadband and communications, PDE, contract manufacturing, and Internet companies has provided a diverse portfolio which has weathered the recent turbulence in the financial markets fairly well."

Investee Companies
Investee companies in which Creative has a position of over 5% include: Adroit Innovations, Behavioral Technology Computer, Catcha.com, Chaincast, Embedded Solutions, Eureka Technologies, GigaPixel (which has entered into a merger agreement with 3DFX), Innomedia, Lafe Technology, MediaRing.com, Mindmaker, Pixaround.com, Planetweb, Silicon Illusions, and 3D Labs.

Investee companies in which Creative has a position of under 5% include: Bex.com, Centillium Technology, EMusic.com, GRIC Communications, HearMe (through its acquisition of AudioTalk), MyTeam.com, Coresma (formerly NetGame), NVIDIA, Sina.com, and TeraLogic.

In addition to the companies listed above, there are other companies in which Creative has invested that are not disclosed at this time due to competitive, strategic, or other reasons.

During the quarter, Creative continued its stock buy-back program, purchasing 379,000 shares at a cost of $6.6 million. Subject to market price and conditions and securities law restrictions, the company plans to continue its buyback program during the fiscal fourth quarter

Creative continues to pursue private and public financing options for certain of the company's subsidiaries in both U.S. and foreign markets, including a current plan to file for an IPO for one of the subsidiary companies. However, in light of the uncertain market for Internet-related IPO's, another subsidiary, Hifi.com, decided to temporarily hold off on plans for a public offering, although the company currently intends to reinstate the process pending more favorable market conditions. The decision to pursue any particular offering will depend upon a variety of factors, including, among other things, market conditions. For filings in the United States, non-U.S. companies are permitted, at their option, to file on a confidential basis with the Securities and Exchange Commission.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Except for the historical information contained herein or in the accompanying conference call, the statements herein and in the call (including information on future products, future marketing efforts, and future revenues, margins, expenses and earnings) are forward looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward looking statements. Such statements are subject to the attached cautionary statements which are provided pursuant to The Private Securities Litigation Reform Act of 1995.

Creative Technology Ltd., a global leader in PC entertainment products, expands the power of the personal computer with Personal Digital Entertainment (PDE) solutions, comprising desktop products, Internet appliances and Internet applications and services. Leveraging in-house technology, partnerships and value-added investments, Creative markets its solutions to consumers and system integrators, with worldwide distribution through traditional marketing channels, OEMs and the Internet. Creative's mission is to expand upon its leadership role in PDE, utilizing innovative technology, broadband and leading-edge designs for technically progressive consumers and entertainment enthusiasts. Explore PDE at www.creative.com. Sound Blaster and Blaster are registered trademarks and Environmental Audio, PC-DVD Encore, DeskTop Theater, 3D Blaster and Graphics Blaster are trademarks of Creative Technology Ltd. Cambridge SoundWorks is a registered trademark of Cambridge SoundWorks, Inc. All other products mentioned herein are trademarks of their respective owners and are hereby recognized as such. Nomad is a registered trademark of Aonix and is used by Creative Technology Ltd. and/or its affiliates under license.

Safe Harbor for Forward Looking Statements:
Except for the historical information contained herein and in the accompanying conference call on today's date, the matters set forth herein and in the accompanying conference call (including our guidance on future revenues, margins, expenses and earnings) are forward looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward looking statements. Such risks and uncertainties include, among others: potential fluctuations in quarterly results due to the seasonality of Creative's business and the difficulty of projecting such fluctuations; the vulnerability of certain markets to currency fluctuations and credit shortages; reductions in the market value of products sold by Creative, including increases in supply or declines in demand or prices for CD-ROM or DVD drives, board and chip-level products, and software products; the short product cycles that characterize most of Creative's products; the increasing proliferation of sound functionality in new products from new and existing competitors and at the application software, chip and operating system levels; Creative's reliance on sole sources for many of its chips and other key components; the timely development, ramp, delivery and market acceptance of new products, including Creative's next generation audio, graphics accelerator, CD-ROM and DVD drives and communications products; the volatility of share prices for companies in Creative's industry and the effect of those prices or other events beyond Creative's control; and other risk factors described in Creative's filings with the Securities and Exchange Commission over the past twelve months. The company undertakes no obligation to publicly release the results of any revisions to such forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.