NeoMagic Receives Nasdaq Delisting Notice Due to Delay in Filing Form 10-Q

      SANTA CLARA, Calif., Sept. 21 /PRNewswire-FirstCall/ -- NeoMagic
Corporation (Nasdaq: NMGC) announced today that on September 18, 2007 it
received a notice from the staff of The Nasdaq Stock Market stating that
NeoMagic is not in compliance with Marketplace Rule 4310(c)(14) because it has
not timely filed its Quarterly Report on Form 10-Q for the quarter ended July
29, 2007 (the "second quarter fiscal 2008 Form 10-Q"). The notice was
automatically generated by Nasdaq and indicated that, due to such noncompliance,
NeoMagic's common stock will be subject to delisting from The Nasdaq Stock
Market. NeoMagic has requested a hearing before a Nasdaq Listing Qualifications
Panel (the "Panel") to appeal the Nasdaq staff's determination. The hearing
request will automatically stay the delisting of NeoMagic's common stock pending
the Panel's decision. There can be no assurance, however, that the Panel will
grant NeoMagic's request or that NeoMagic's common stock will not be delisted.

      NeoMagic and its audit committee are working diligently to complete the
previously announced internal review related to the terms of the Company's
agreements with its customers and the timing of revenue recognition. The Company
is committed to filing its second quarter fiscal 2008 Form 10-Q as promptly as
possible.

      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, T-DMB, E-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
broad patent portfolio that covers NeoMagic's proprietary array processing
technology, embedded DRAM and other technology. Information on the Company may
be found on the World Wide Web at http://www.neomagic.com.

      This press release contains forward-looking statements within the meaning
of the Securities Act of 1933 and the Securities Exchange Act of 1934.
Forward-looking statements in this press release include the anticipated holding
of a hearing before the Panel, the potential delisting of NeoMagic's common
stock and the timing of filing of the second quarter fiscal 2008 Form 10-Q.
These statements are based on management's current expectations and are subject
to uncertainty and changes in circumstances. Actual results may vary, perhaps
materially, from those contained or suggested by these statements. Risks that
could cause actual events to differ materially from the Company's
forward-looking statements include, but are not limited to, actions or decisions
of the Nasdaq or Panel, encountering unexpected information in the Audit
Committee's internal review process, or being unable to complete the internal
review as quickly as expected. For a discussion of risk factors affecting the
Company's business generally, please see the Company's filings with the United
States Securities and Exchange Commission (SEC), including the Annual Report on
Form 10-K for the fiscal year ended January 28, 2007 and the Quarterly Report
for the fiscal quarter ended April 29, 2007, which 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.

      NeoMagic and the NeoMagic circle logo are registered trademarks, and
MiMagic and NeoMobileTV are trademarks, of NeoMagic Corporation. All other
trademarks are the property of their respective owners. NeoMagic disclaims any
proprietary interest in the marks and names of others.

      (Logo: http://www.newscom.com/cgi-bin/prnh/20020802/NMGCLOGO)

SOURCE  NeoMagic Corporation
    -0-                             09/21/2007
    /CONTACT:  Steve Berry, Chief Financial Officer of NeoMagic Corporation,
    +1-408-988-7020; or investor relations,
Erica Mannion of Sapphire Investor Relations, LLC, +1-212-766-1800,
    for NeoMagic Corporation/
    /First Call Analyst: /
    /FCMN Contact: jdietz@neomagic.com /
    /Photo:  NewsCom:  http://www.newscom.com/cgi-bin/prnh/20020802/NMGCLOGO
             AP Archive:  http://photoarchive.ap.org
             PRN Photo Desk photodesk@prnewswire.com/
    /Web site:  http://www.neomagic.com/
    (NMGC)