Zoran Corporation Reports Fourth Quarter and Year End 2005 Results

Future Outlook
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.

Excluded in the future outlook for the first quarter of 2006 are the impact of monies to be received under the MediaTek litigation settlement announced on January 26, 2006. The following outlook is based only on Zoran’s expected results from core operations.

The Company is currently expecting first quarter 2006 revenues to range between $103 million and $106 million with gross margins of approximately 50 to 51 percent. Operating expenses are expected to be in a range of $46 million to $47 million and, including acquisition related costs of $13 million but excluding option expense charges under FAS 123R, net loss for the quarter is expected to be in the range of $0.15 and $0.18 per share. Non-GAAP earnings for the quarter, which excludes these acquisition related costs, are expected to range between $0.10 and $0.12 per diluted share.

Zoran will provide more commentary on its fourth quarter results during the quarterly conference call.

Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Zoran reports non-GAAP financial results. Non-GAAP net income (loss) excludes amortization of acquisition-related intangibles, amortization of deferred stock-based compensation, restructuring expense and in-process research and development expenses.

Non-GAAP net income (loss) gives an indication of the Company’s baseline performance before gains, losses or other charges that are considered by management to be outside of our core operating results. The Company believes that this presentation of non-GAAP results of operations provides useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations as they exclude charges specifically related to acquisitions made by the Company which we consider to be outside of our core operating results. The Company believes when GAAP results of operations are viewed in conjunction with non-GAAP results of operations, investors are provided with a more meaningful understanding of the Company’s ongoing operating performance. In addition, the Company’s management uses these non-GAAP measures for reviewing the financial results of the Company and for planning and forecasting future periods. These measures are not in accordance with or an alternative for GAAP financial statements and may be materially different from non-GAAP measures used by other companies.

Quarterly Conference Call
Zoran Corporation has scheduled a conference call for 5:00 p.m. ET today to discuss fourth quarter results. To listen to the call, please call 617-847-3007 approximately five minutes prior to the start of the call. For those who are not available to listen to the live conference call, a replay will be available from approximately 4:00 p.m. PT on January 30, 2006, until 4:00 p.m. PT on February 5, 2006. The access number for the replay is 617-801-6888, confirmation number 43056209. Additionally, the conference call will be broadcast live over the Internet and can be accessed by all interested parties through the investor relations section of Zoran’s website at www.zoran.com. Please access the website at least fifteen minutes prior to the start of the call to register and to download and install any necessary audio software.

Company Profile
Zoran Corporation, based in Sunnyvale, California, is a leading provider of digital solutions for applications in the growing digital entertainment and digital imaging markets. With two decades of expertise developing and delivering digital signal processing technologies, Zoran has pioneered high-performance digital audio and video, imaging applications, and Connect and Share technologies for the digital home. Zoran’s proficiency in integration delivers major benefits for OEM customers, including greater capabilities within each product generation, reduced system costs, and shorter time to market. Zoran-based DVD, digital camera, DTV, multimedia mobile phone, and multifunction printer products have received recognition for excellence and are now in millions of homes and offices worldwide. With headquarters in the U.S. and operations in Canada, China, England, Germany, India, Israel, Japan, Korea, and Taiwan, Zoran may be contacted on the World Wide Web at www.zoran.com or at 408-523-6500.