PIXELWORKS exercises option to acquire remaining interest in JALDI SEMICONDUCTOR

Tualatin, Ore., May 2, 2002 – Pixelworks, Inc. (NASDAQ:PXLW), a leading provider of system-on-a-chip ICs for the advanced display market, today announced that it has exercised its option to acquire all of the remaining outstanding shares and options of Jaldi Semiconductor Corporation in exchange for 1.85 million shares of Pixelworks Common Stock.

Jaldi's innovative, reconfigurable DSP technology will extend Pixelworks' industry leading ImageProcessor Architecture. By sharing a common microprocessor core, customers can leverage their investment in Pixelworks software across a common architecture to develop a range of advanced display products resulting in faster time to market at competitive prices.

"The creative and experienced team at Jaldi will accelerate Pixelworks' presence in the advanced television market with advanced video processing system-on-a-chip technology. We are looking forward to working as one team to leverage complementary technologies in order to raise the bar for advanced video performance at competitive prices," said Allen Alley, President, CEO and Chairman of Pixelworks.

"We are proud to join the Pixelworks team which has earned a reputation for setting the standard for innovation in the advanced display industry," said Lance Greggain, Chief Executive Officer and co-founder of Jaldi. "We have been collaborating with Pixelworks to bring our cutting edge performance and features to the consumer television market."

The acquisition is expected to close in the third quarter and will be accounted for under the purchase method of accounting. Pixelworks expects to record a one-time charge in the quarter ending September 30, 2002, for purchased in-process research and development expenses related to the acquisition.

About Pixelworks, Inc.

Pixelworks, headquartered in Tualatin, Oregon, is a leading provider of system-on-a-chip ICs for the advanced display market. Pixelworks' solutions process and optimize video, computer graphics and Web information for display on a wide variety of devices used in business and consumer markets. Pixelworks ImageProcessor Architecture powers the world's most highly regarded flat panel display products, including monitors and projectors marketed by Compaq, Dell, NEC-Mitsubishi, Samsung, SANYO, Sharp, Sony and ViewSonic. For more information, please visit the company's Web site at http://www.pixelworks.com/.

About Jaldi Semiconductor Corporation

Jaldi is a privately held, development stage, fabless semiconductor company designing high-performance ICs and cores based on their patent pending application specific reconfigurable Digital Signal Processing architecture, algorithms and software for the advanced television industry. Founded in May 1999, Jaldi is headquartered in Markham, Ontario, a suburb of Toronto, and the company has approximately 30 employees.