Financial Analysts:                   Media:
Ng Keh Long                           Rick Myllenbeck
Vice President, Corporate Treasurer   Director, Public Relations

SINGAPORE - August 9, 1996 - Creative Technology Ltd. (NASDAQ: CREAF) today announced financial results for the fourth quarter and fiscal year ended June 30, 1996.

Sales for the fourth quarter of fiscal 1996 were US$292.3 million, compared to US$270.7 million for the same quarter last year. Sales for the year ended June 30, 1996 were US$1,308.1 million, compared to US$1,202.3 million for the previous fiscal year.

Net loss for the fourth quarter of fiscal 1996 was US$38.1 million, compared to a net loss of US$24.0 million for the same quarter last year. Net loss for fiscal year 1996 was US$37.6 million, compared to net income of US$26.5 million for fiscal year 1995. Loss per share for the fourth quarter was US$0.43, compared to a loss of US$0.27 per share for the same quarter last year. Loss per share for fiscal 1996 was US$0.43, compared to earnings of US$0.30 per share for fiscal 1995.

Included in the fourth quarter results was a US$12.0 million charge relating to the planned cessation of the company's CD-ROM drive manufacturing operations in Singapore. Creative decided in that quarter to terminate its CD-ROM drive manufacturing operations during the fiscal quarter ending September 30, 1996, and, as a result of this decision, has taken a charge for closure costs comprised primarily of excess component inventory and a write-down of certain manufacturing equipment. Also included in the fourth quarter was US$21.7 million in inventory adjustments due to the decline in market value of 8x CD-ROM drives and first generation VL-Bus graphics products. Gross margins during the quarter were also negatively affected by sales of CD-ROM drive-based products at lower than expected prices in certain regions.

Other factors from prior quarters included in the results for fiscal year 1996, were inventory and pricing adjustments taken in the second and third quarters amounting to US$42.4 million for CD-ROM drives and DRAM memory components and a charge of US$4.6 million for the previously announced settlement of certain litigation in the third quarter.

"Despite a difficult year for our industry, Creative maintained a solid financial position over the last quarter," said Sim Wong Hoo, chairman and chief executive officer of Creative Technology Ltd. "Our cash position increased 60 percent to $196 million; we experienced a dramatic improvement in our inventory position; and, during the fiscal year, we sustained substantial on-going reductions in our operating expenses.

"Creative continues to maintain a strong position in the audio and multimedia market,"

said Sim. "We also believe that we are in a strong position to lead and take advantage of the expanding global multimedia market where our products are in high demand -- and often requested specifically by our brand name. We will also continue to develop new and innovative technology -- especially in the areas of audio and 3D graphics over the Internet -- that underscore Creative's industry leadership by providing products that customers want."

Recent Announcements

During fiscal 1996, the company made a number of announcements that continue to demonstrate the company's adoption of standard-setting and advanced multimedia technology; it also made several moves to strengthen its worldwide leadership and management structure, including:

• The announcement of Creative's next generation Sound Blaster products including the Sound Blaster AWE 32 PnP, which provides professional quality audio and features Creative's advanced wave-table synthesis technology for hundreds of real instrument sounds and effects
• The introduction of three new high-end, wave-table multimedia upgrade kits featuring the latest in Creative's Sound Blaster audio and high-speed CD-ROM technology
• The addition of the new Graphics Blaster product family of multimedia accelerator cards which bring 64-bit accelerator technology to customers at an unprecedented low price
• Enhanced communications products including Internet Blaster 33.6 PnP -- the first all-in-one 33.6 Kbps Internet solution -- and Phone Blaster 33.6 PnP, Creative's next generation Phone Blaster solution, which is an all-in-one multimedia, telephone communications and Internet solution for the small office, home office user
• Participation in industry-wide interoperability testing with other leaders in the desktop videoconferencing market to establish transmission standards over regular phone lines
• Received numerous awards from a variety of top trade publications and organizations including PC/Computing's prestigious "Most Valuable Product" Award for the Sound Blaster AWE32 PnP; PC Magazine's Editors Choice Award for the Sound Blaster Home CD Kit; and PC World's 1996 World Class Award for the Sound Blaster Discovery CD 8x.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Except for the historical information contained herein and/or 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 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 world's leading provider of advanced multimedia solutions for personal computers, including sound, graphics, communications and videoconferencing products. The company's Sound Blaster technology has been accepted as the worldwide standard sound platform for PCs, and the company's global distribution network is the most extensive in the multimedia industry. Creative is focused on enhancing the overall user experience by providing powerful, enabling, high-value technology for the mass market.

Sound Blaster is a registered trademark and Blaster is a trademark of Creative Technology Ltd. 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; reductions in the cost of products sold by Creative, including increases in supply or declines in demand or prices for CD-ROM 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 at the chip and OEM level; Creative's reliance on sole sources for many of its chips and other key components; the timely ramp, delivery and market acceptance of new products, including Creative's graphics accelerator, video conferencing, CD-ROM drive and communications products; the availability of operating capital and capital to refinance Creative's outstanding long term debt on acceptable terms; the volatility of share prices for companies in Creative's industry and the effect of those prices or events beyond Creative's control; and other risk factors described in Creative's fillings with the Securities and Exchange Commission over the past twelve months.