SANTA CLARA, Calif., Dec. 13 -- NeoMagic Corporation (NASDAQ:NMGC) announced today that Freenex, Inc. has selected NeoMagic's MiMagic 6+ multimedia processor for its multimedia enabled GPS navigation system.

This navigation system is targeted at the automotive market and includes an exterior rear-mounted camera and an interior LCD display device for GPS navigation and video playback. The addition of the camera to the system helps drivers avoid collisions while moving in reverse.

"In the Freenex GPS navigation system, the MiMagic 6+ processor is the system host that receives data from a GPS receiver and runs the mapping software," said Doug Young, President and CEO of NeoMagic Corporation. "Additionally, the MiMagic 6+ processor can support many multimedia features, including still image capture, video record and playback, digital mobile TV and 3D graphics. The MiMagic 6+ processor supports the combination of these multimedia features with GPS navigation capability to enable innovative designs for the rapidly growing GPS navigation market," he continued.

"The ability to combine multimedia features in a GPS navigation system using a single processor enables us to add key differentiating features without adding cost to the end-system. The MiMagic 6+ processor allows us to continue to bring new innovative GPS products to the market at a mass-market price-point," said Mr. Paul Jang, R&D Team Director of Freenex, Inc.

About NeoMagic

NeoMagic Corporation delivers semiconductor chips and software that provide mobile solutions that enable new multimedia features for handheld devices. These solutions offer low-power consumption, small form-factor and high performance processing. The Company demonstrated one of the first solutions used for H.264 video decoding in a mobile digital TV phone, and is developing and delivering solutions for audio/video processing of the dominant mobile digital TV standards, including ISDB-T, DMB, and DVB-H. For its complete system solution, NeoMagic delivers a suite of middleware and sample applications for imaging, video and audio functionality, and provides multiple operating system ports with customized drivers for the MiMagic product family. NeoMagic has a patent portfolio of over 25 patents that cover NeoMagic's proprietary array processing technology, embedded DRAM and other technology. Information on the Company may be found on the World Wide Web at www.neomagic.com .

About Freenex, Inc.

Freenex, Inc. delivers innovative products for the automotive telematics market segment. These products combine car navigation, multimedia and entertainment features into a single device. Freenex ships telematics products in Europe, Southeast Asia, South America and North America. Freenex, Inc. was founded in 2002 and is currently headquartered in Seoul, South Korea. Information on the Company may be found on the World Wide Web at www.freenex.com .

This press release contains forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, including the Company's plans to continue shipping products to Freenex, Inc. These forward-looking statements reflect current expectations. However, actual events and results could vary significantly based on a variety of factors including but not limited to the market acceptance of Freenex, Inc.'s products. Freenex, Inc. does not have a contract with the Company that specifies a minimum level of purchases. In addition, Freenex, Inc. could stop purchasing products from the Company at any time or switch to other vendors. Additional risks that could affect the Company's future operating results are more fully described in the Company's most recent annual report, its most recent quarterly report and other filings with the United States Securities and Exchange Commission (SEC), and are available online at http://www.sec.gov/. NeoMagic may, from time to time, make additional written or oral forward- looking statements, including statements contained in filings with the SEC and reports to shareholders. NeoMagic does not undertake the obligation to update any forward-looking statements that may be made by or on behalf of the company, except as may be required by law.