MICRONICS COMPUTERS COMPLETES ACQUISITION OF ORCHID TECHNOLOGY


Industry Leader Combines Leading Edge System Board and Innovative Multimedia Product Lines for Single Source Technology Solutions

Fremont, CA, August 23, 1994 -- Micronics Computers, Inc. (Nasdaq: MCRN), today announced that it has completed the acquisition of Orchid Technology, a privately held provider of multimedia solutions for the personal computer market. Orchid is now a wholly owned subsidiary of Micronics, a supplier of system boards for use in the personal computer and workstation markets. Under the terms of the agreement, Micronics will issue approximately 1,870,000 shares of its common stock in exchange for all the common stock of Orchid. Micronics will then have a total of about 13.3 million shares of common stock outstanding. Additionally, Micronics has assumed all of Orchid's outstanding employee stock options.

"The Orchid acquisition marks a strategic change in the way we think medium-size companies in this industry will successfully compete in the future. The market has become increasingly diverse in its technology needs, yet compatibility and price continue to be of paramount importance to our customers. By leveraging our leading-edge system board technology and Orchid's multimedia products, we can now provide our customers with a single source, cost-effective solution for critical hardware components in a multimedia personal computer," said Steve Kitrosser, Micronics chairman and chief executive officer.

Robert Gunn, vice president of marketing and sales, noted: "The complementary nature of each company's marketing channels and global business presence is beneficial to our customers. We believe these strengths can give us a strategic edge in delivering the next generation of multimedia-based products. Moreover, the market continues to demand that complex hardware-based technologies evolve into user-friendly solutions. The ease with which we will now be able to integrate more peripheral functions onto our system boards will help us in reducing time to market while providing the most competitively priced solutions available."

Micronics is exploring numerous ways to incorporate Orchid's innovative technology into the Company's products. According to Gunn, the digital signal processor technology (DSP) that is used in Orchid's sound products will take on a special significance in the marketplace with next year's introduction of Microsoft's 'Chicago' upgrade to Windows.

Orchid Technology is a 12-year-old privately owned company that employs about 120 people worldwide. The firm's revenues for the year ended June 30, 1994 were approximately $31 million, resulting in a net loss for the year. As a result of business synergies and cost management efforts following the merger, management believes that Orchid can return to profitability in the near term. Orchid has a leading market presence in North America and Europe and strong end user and value-added reseller (VAR) customer base. Approximately 30% of Orchid's sales come from its European business. Orchid is well known for its Fahrenheit and Kelvin 64 graphics accelerators. The Company is also an industry leader in DSP wavetable-based technology as showcased in its array of popular multimedia products including SoundWave 32 and GameWave 32. Wavetable-based sound cards deliver more realistic sound than FM synthesis-based cards. Other products include the award-winning Vidiola line of digital capture and playback systems.

Micronics pioneered the design of high-performance personal computer system boards with local bus architectures. The Company offers a broad line of advanced 486- and Pentium-based system boards targeted for server and modular desktop applications as well as low-cost, highly integrated boards for the rapidly growing small office/home office (SOHO) market. The Company recently added "plug and play" capabilities to its product line.

Founded in 1986, Micronics employs approximately 300 people worldwide and is a leader in the Original Equipment Manufacturer (OEM) channel with a strong presence in North America and growing marketshare in Asia-Pacific. The Company recently reported net sales of $36.4 million for the third quarter ended June 30, 1994.

Orchid Technology is a leader in multimedia solutions for the personal computer market. The Company develops, designs and manufactures a wide range of industry leading multimedia technology including graphics accelerators, digital video adapters and digital signal processing cards.

Micronics Computers, Inc. is an industry leader in providing high-quality advanced system boards and peripherals for high-performance personal computers sold by OEM, distributors and value-added resellers. A system board contains the microprocessor, supporting logic circuitry and memory components that form the core of a personal computer.

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