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http://www.creative.com/corporate/investor/releases.asp?pid=12396

SINGAPORE - April 5, 2006 - Creative Technology Ltd. (NASDAQ: CREAF), a worldwide leader in digital entertainment products, today announced that it is projecting an operating loss of approximately $55 million to $65 million on revenues of approximately $220 million to $230 million for the third quarter of its 2006 fiscal year, ended March 31, 2006. These results are in addition to the previously announced non-cash impairment charge of $25 million and the restructuring charge of $9 million associated with the refocus of the Company's graphics business in the period. The operating loss is primarily attributable to a drop in flash memory prices in the quarter, with a particularly drastic drop in flash memory prices at the end of the quarter. The sharp drop in memory prices had a significant negative impact on sales in March and resulted in lower revenues and gross margins and inventory write-downs in the period.