VIALTA, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                             (unaudited)
                   (in thousands, except per share)

                                                   Three months ended
                                                       March 31,
                                                 ---------------------
                                                      2004       2003
                                                 ---------- ----------

Revenues, net                                       $4,974     $3,843
Cost of goods sold                                   1,396        863
                                                 ---------- ----------
Gross profit                                         3,578      2,980
                                                 ---------- ----------
Operating expenses:
    Engineering and development                        336        968
    Sales and marketing                                605        442
    General and administrative                       1,360      1,730
                                                 ---------- ----------
        Total operating expenses                     2,301      3,140
                                                 ---------- ----------
Operating income(loss)                               1,277       (160)


Interest income, net                                   209        188

                                                 ---------- ----------
Net income                                          $1,486     $   28
                                                 ========== ==========

Net income (loss) per share:
    Basic                                           $ 0.02     $    -
                                                 ========== ==========
    Diluted                                         $ 0.02     $    -
                                                 ========== ==========

Weighted average common shares:
    Basic                                           82,803     82,238
                                                 ========== ==========
    Diluted                                         88,552     84,153
                                                 ========== ==========




                             VIALTA, INC.
                CONDENSED CONSOLIDATED BALANCE SHEETS
                             (unaudited)
                            (in thousands)

                                    March 31, 2004   December 31, 2003
                                   ----------------- -----------------
Assets
Current assets:
  Cash and cash equivalents                 $14,592           $13,756
  Restricted cash                             3,033             2,226
  Short-term investments                      8,107            10,552
  Accounts receivable, net                    1,880             3,941
  Inventory                                   6,110             5,196
  Prepaid expenses and other                    495               729
                                   ----------------- -----------------
    Total current assets                     34,217            36,400

  Property and equipment, net                   494               685
  Other assets                                   29                29
                                   ----------------- -----------------

    Total assets                            $34,740           $37,114
                                   ================= =================

Liabilities and Stockholders'
 Equity
Current liabilities:
  Accounts payable                             $759            $1,915
  Accrued expenses and other                  2,485             3,149
  Deferred profit                             1,955             3,997
                                   ----------------- -----------------
    Total current liabilities                 5,199             9,061
                                   ----------------- -----------------

Stockholders' equity:
  Common stock, $0.001 par value                 95                95
  Additional paid-in capital                144,114           144,114
  Treasury stock                             (9,458)           (9,458)
  Accumulated deficit                      (105,223)         (106,709)
  Accumulated other comprehensive
   income                                        13                11
                                   ----------------- -----------------
    Total stockholders' equity               29,541            28,053
                                   ----------------- -----------------

      Total liabilities and
       stockholders' equity                 $34,740           $37,114
                                   ================= =================

About Vialta

Vialta develops, designs and markets unique and innovative home entertainment and communications products for the mainstream consumer. The company was formed in April 1999 and is publicly traded on the OTC Bulletin Board under the symbol VLTA. The company is headquartered in Fremont, California with offices in Los Angeles and Hong Kong.

Forward-Looking Statements

The matters discussed in this news release include certain forward-looking statements that involve risks and uncertainties, including, but not limited to, the possible reduction of consumer spending, the timely availability and acceptance of the Company's new and existing products, the impact of competitive products and pricing, the dependence on continued growth in demand for consumer products, the risk that products shipped by the Company will be returned, and the other risks detailed from time to time in the SEC reports of Vialta, including the reports on Form 10-K and Form 10-Q. Actual results could differ materially from those projected in the forward-looking statements.