ESS Technology Signs On as Newest DivXNetworks Embedded Software Partner

Leading DVD Chip Company Will Create DivX Certified Reference Platforms for Next-Generation Consumer Electronics Products

San Diego, CA and Fremont, CA–Jan 8, 2003 — DivXNetworks, Inc, the company that created the revolutionary patent-pending DivX ™ video compression technology, and ESS Technology, Inc. (NasdaqNM:ESST – News), the world’s leading provider of video decoder chips, today announced a technology partnership to create DivX certified reference platforms for next-generation DVD players and consumer electronics products.

Under the agreement, ESS Technology will bring to market DivX certified reference platforms based on ESS’s Vibratto™ family of DVD chipset solutions. ESS Technology has developed a line of reliable, high quality, single chip and chipset solutions that allow manufacturers to satisfy growing consumer demand for cutting-edge multimedia technology. DivX video, which offers DVD-quality video at 7-10 times greater compression than MPEG-2, is the world’s most popular MPEG-4 compatible video compression technology with over 75 million worldwide users. A wide range of DivX-certified consumer electronics devices, from portable video players to DVD players and set-top boxes, are scheduled to hit the market in 2003.

“We are dedicated to providing manufacturers with the most feature-rich and compelling products to power the next-generation of multimedia DVD players, and DivXNetworks is an ideal partner to help us achieve that goal,” said Patrick Ang, Executive Vice President and Chief Operating Officer of ESS Technology. “With its huge global brand equity, excellent visual quality, and unsurpassed compression ratios, decoding of DivX video technology is an invaluable added feature to our leading Vibratto™ family of video decoders.”

“ESS Technology is uniquely positioned to provide versatile, high performance chip solutions that meet the global market for DivX-certified platforms,” said Jordan Greenhall, co-founder and chief executive officer of DivXNetworks www.divxnetworks.com. “We’re excited to work with ESS to help bring the power of DivX video to manufacturers and, by extension, the global consumers who have been anxiously awaiting the debut of DivX certified home theatre devices.”

DivX Certification includes a full DivX software development kit to help third parties make their existing solutions compatible with DivX technology, or to help them create new solutions from scratch. The DivX Certified Partner Program was created to enable the development of official DivX-enabled consumer electronics products to meet the global demand for high-quality DivX convergence devices. For more information on DivX certification process, visit www.divx.com/certified.

About DivXNetworks

DivXNetworks is a consumer-focused video technology company positioned at the center of multimedia convergence. The company’s core offering is the DivX ™ video codec, the world’s most popular MPEG-4 compatible video compression technology with over 75 million users worldwide. Often called “the MP3 of video,” the patent-pending DivX video technology offers DVD-quality at 10 times greater compression than MPEG-2 files, enabling full length films to easily fit on a CD or be delivered over broadband connections. DivX video technology powers a range of applications that span the convergence value chain, from a secure IP-based video-on-demand solution to next-generation consumer electronics products and video software applications. DivXNetworks is headquartered in San Diego, California, with a satellite office in Los Angeles. For more information, visit www.divxnetworks.com.

About ESS Technology

ESS Technology, Inc., is a leading supplier of high-performance feature-packed chips for the rapidly expanding DVD and digital entertainment markets. ESS’s advanced products deliver and manage entertainment and information in the home. ESS, headquartered in Fremont, California, has R&D;, sales, and technical support offices worldwide. ESS Technology’s common stock is traded on the Nasdaq under the symbol ESST. ESS Technology’s web site address is www.esstech.com.