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CREATIVE TECHNOLOGY ANNOUNCES FIRST QUARTER FISCAL 2000 EARNINGS

Exceeds Expectations Based on Stronger than Expected Revenues

SINGAPORE - October 27, 1999 - Creative Technology Ltd. (NASDAQ: CREAF), the world's leading provider of multimedia products for personal computers, today announced financial results for the first quarter of fiscal 2000, ended September 30, 1999.

Sales for the first quarter of fiscal 2000, which the company had expected to reach approximately US$250 million, were instead higher at US$269.1 million, based on stronger than expected audio sales. This compares to US$279.0 million for the same quarter last year.

Based on the higher than expected revenues and improved margins, net income and earnings per share were also higher than expected, with a net income of US$10.8 million and earnings per share of US$0.13, including US$4.4 million or five cents per share from investment gains. This compares to net income of US$21.5 million and earnings per share of US$0.23 for the same quarter last year.

During the quarter, Creative continued its stock buy-back program, purchasing approximately 1.6 million shares at a cost of US$16.5 million. Because the buyback was ongoing during the quarter, the shares repurchased did not fully impact the number of shares used in the earnings per share calculations.

"We are delighted to report stronger than expected numbers in a quarter in which we had forecast significant difficulties," said Craig McHugh, president of Creative Labs. "Sound Blaster Live! gained tremendous momentum. Its broad acceptance in the retail market is now being echoed in the OEM and system integrator channels. The stronger than expected contribution from Creative's audio business offset the difficulties we had cautioned might occur as we transitioned away from our previous graphics vendors during the quarter."

"I'm very pleased with the ramp-up in our Sound Blaster Live!," said Sim Wong Hoo, Chairman and CEO. "It builds on the huge success we have had in the gaming market and adds the even larger market opportunity of Internet audio - especially downloadable digital music in all formats, including MP3."

"In addition to our success with audio, we have made significant progress on our key initiatives since our last earnings release. We launched hifi.com, kicking off an advertising campaign targeted at making hifi.com the number one e-commerce site for consumer electronics. Our site, hifi.com, offers one of the Internet's broadest consumer electronics product lines, combined with unique consumer benefits and an acclaimed customer call center."

"We announced our second Personal Digital Entertainment (PDE) Internet device, the Video Blaster WebCam Go, and our second generation of NOMAD digital audio player, the NOMAD II. We also announced LAVA! (Live Audio Visual Animation!) which we believe will be the standard for interactive internet music visuals."

"In addition, our value-added venture fund, from its inception, has now invested in eighteen of our strategic partners in broadband, Internet and PDE, representing an investment of US$50 million, fully investing our initial fund. The Board of Directors today approved expanding the fund with an additional US$50 million."

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. is the leading provider of advanced multimedia solutions for personal computers. It develops, manufactures and markets a wide array of solutions for the PC, entertainment, education, music and productivity tools markets. Creative's products are marketed through the OEM, systems integrator and retail channels under a variety of trademarks, including the "Blaster" family name. With the new Sound Blaster PCI standard, Creative has produced a solution that utilizes a combination of hardware and software for near-perfect compatibility with existing DOS and Windows titles. 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. 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.

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.