Accel Technology to Become Wholly-Owned Oak Subsidiary, Continuing Its Turnkey CD-RW and DVD Recordable Drive and Appliance Design Business and Expanding Oak's Customer Base and Design Capabilities in Japan

SUNNYVALE, Calif., July 9 /PRNewswire/ -- Oak Technology, Inc., a leading provider of embedded solutions for optical storage and digital imaging, announced today that it has acquired Accel Technology Ltd., an Osaka, Japan-based design engineering firm that focuses on turnkey CD-RW, and DVD Recordable drives for PC and consumer use. Oak has used Accel's design services since Accel was founded in 1995. The acquisition expands Oak's global design capabilities for optical storage and allows Oak to more quickly introduce turnkey product to the PC and consumer markets.

Under the terms of the acquisition, Oak will purchase all outstanding shares of Accel Technology Ltd. Accel will become a wholly owned subsidiary of Oak technology and will be integrated into Oak's Optical Storage Group (OSG). Accel will continue to operate under the Accel Technology name, retain its existing customers, and be guided by Accel president Masaharu Morishima, who will become vice president of the Accel Technology Division within OSG. Mr. Morishima will report to Shlomo Waser, senior vice president and general manager, OSG.

Representative designs completed by Accel include CD-ROM drives for a major manufacturer's game consoles, half-height and slim combo (CD-RW/DVD) and CD-RW drives, and DVD- recordable appliances, for a number of brand name CE manufacturers, including Ricoh, Sega and Tottori Sanyo, and other unannounced leading optical drive manufacturers.

"This acquisition is part of our ongoing initiative to maintain our leadership position in the CD-RW drive controller market, as we expand into other optical storage markets, including DVD recordable solutions," said Young Sohn, president and CEO of Oak Technology. "The acquisition allows us to compete more effectively in turnkey market segments and to better service our current and future customer base by building a global network of design centers. Accel's turnkey designs will enable us to ramp more quickly in the DVD recordable segment and participate in the important Japanese DVD player market through Accel's established customer base. The addition of Accel's experienced optical storage design team to our Optical Storage Group will also be a strategic advantage as we continue to develop new CD-RW and DVD recordable solutions for the PC and consumer markets."

"We have had a successful long-term working relationship with Oak, and are delighted to become part of Oak's Optical Storage Group," said Morishima. "Our experience in CD-RW, CD-ROM and DVD drives for the consumer and PC markets complements Oak's strengths in leading edge optical storage controller design."

Earlier this year, Oak opened an analog design center in Manchester, England and also has design facilities at its headquarters in Sunnyvale, CA; Woburn, MA; Taipei, Taiwan; and Guangdon, China. Accel's facilities in Osaka will become part of this global design network.

Oak's Optical Storage Controller Technology

Oak, founded in 1987, has established a leadership position in the optical storage segment. The Company is recognized as one of the leading suppliers of optical storage controllers, having sold more than 130 million optical storage controllers to date. The Company's recent product development efforts in the area have focused on emerging segments, such as CD-RW and Combo drives as well as DVD recordable solutions.

Oak's latest generation of advanced CD-RW optical storage controllers have been selected by most of the OEM suppliers of CD-RW drives. In addition, in late 2000, Oak introduced one of the industry's first integrated Compact Disc -- ReWritable (CD-RW)/DVD "Combo" controllers, which allows optical storage drive manufacturers to develop high-performance optical storage solutions capable of reading and writing Compact Discs and reading DVD discs from a single slim line drive.

About Oak Technology

Oak Technology, Inc., a leading provider of solutions for the storage, manipulation and distribution of digital content, is committed to driving the emerging world of connected Information Appliances. The company's fully integrated products and technologies target two key markets: optical storage (CD-RW and DVD for PC and consumer) and digital imaging (advanced copiers, printers, faxes, scanners and MFPs). Founded in 1987, Oak is headquartered in Sunnyvale, Calif., and has sales offices, design centers and research facilities around the world. The company trades on the Nasdaq Stock Exchange under the symbol OAKT. Additional information about Oak and its digital solutions can be found at www.oaktech.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: In addition to the historical information contained herein, statements in this press release may contain forward-looking statements within the meaning of the Federal securities laws and are subject to the safe harbors created thereby. Forward-looking statements herein include but not limited to the strength of the company's fundamental position, the company's belief in the industry-wide nature of the current slowdown, the short-term nature of the transition period, and the outlook for financial performance for the current quarter and beyond. These statements involve risks and uncertainties and may differ materially from actual future events or results. The following are among the factors that could cause actual outcome to differ materially from those set forth: without limitation, the rate of adoption of new technology, the rate of growth of the CD-RW market, changes in product mix or distribution channels; the demand for semiconductors and end-user products that incorporate semiconductors; technological difficulties and resource constraints encountered in developing and/or introducing new products, and market acceptance of new products. Forward-looking statements contained in this press release regarding expected financial results, industry trends, sales and future product development and business strategies and activities should be considered in light of these factors, and those factors discussed from time to time the Company's public reports filed with the Securities and Exchange Commission, such as those discussed in the Company's Annual Report on Form 10K for fiscal year ending June 30, 2000, and in quarterly reports on Form 10Q.

NOTE: Oak Technology is a registered trademark of Oak Technology, Inc. and the Oak logo is a common law trademark of Oak Technology, Inc. All others are trademarks of their respective owners.

SOURCE: Oak Technology, Inc.