ATI Technologies Inc. (TSE: ATY, NASDAQ: ATYT), a world leader in graphics, video and multimedia solutions, today unveiled a new business strategy that will see the Company enter into manufacturing and distribution partnerships with leading original design manufacturers (ODMs) and add-in board manufacturers (AIBs) - a move that will significantly increase sales and distribution penetration of ATI chip technologies worldwide.

These partners will become the major suppliers of ATI technologies to system integrators (SIs) and distributors worldwide. ATI will continue to provide chips and board products to OEMs in the value, mainstream, high-end and workstation markets and will continue to support ATI branded products in the retail channel. The new strategy will be officially rolled out at Computex, one of the world's largest computer shows, held in Taipei from June 4 to 8, 2001.

"This is great news for our customers and partners worldwide, who now have multiple suppliers for ATI's industry-leading graphics acceleration technology," said David Orton, President & Chief Operating Officer, ATI Technologies Inc. "The market has changed over the past year-and-a-half and it is now time for ATI to deepen its penetration into the system integrator and distribution markets through this new strategy."

The new strategy will provide SIs, retailers and distributors with a wide choice of suppliers of ATI desktop graphics chips and a more competitive market, in general. Agreements have been reached with many ODM partners, with more partner announcements to be made at Computex. "Our ODM partners are talented, agile and cost-effective companies, serving the most demanding high-volume customers you will find in the industry," said K.Y. Ho, Chairman and CEO, ATI Technologies Inc. "ATI is the world's best-known brand of graphics processor and this is key to attracting top ODMs to incorporate our products and market them to PC vendors, system integrators and distributors."

ATI will offer the full range of graphics technologies to its ODM and AIB partners, affording them a significant opportunity to increase sales, revenue and market share. Reaction from ODMs and AIBs has been positive, as they now have direct access to ATI products for their customers. ATI will enable them to get to market in a timely, high-quality fashion by providing a full range of reference designs, optimised software drivers on the web, and technical support.

SI sales are estimated to be almost 50 per cent of total PC sales worldwide, according to Jon Peddie of JPA Associates. ATI's new strategy will result in increased market penetration of ATI graphics technology in this sector.

"ATI's enhanced manufacturing and distribution model continues a trend we are seeing in the industry - recognition that its core competency is chip design," said Dr. Peddie. "The Company's decision will increase the price-competitiveness and general availability of its products in the marketplace."

The new strategy was developed in line with ATI's commitment to driving profitability and earnings-per-share (EPS) growth by improving gross margins, reducing inventory, and increasing market share, added Mr. Orton.

Company Background

Founded in 1985, ATI Technologies Inc. is a world leader in the supply of graphics, video and multimedia solutions for personal computer and Mac platforms. The pioneer, innovator and market leader in the graphics industry, ATI provides cutting-edge technologies for the PC, set-top box, game console and other consumer appliances markets. The Company has more than 1,900 employees supporting customers from its headquarters in Markham, Ontario, Canada, as well as from offices in Barbados, France, Germany, Hong Kong, Ireland, Japan, Malaysia, the United Kingdom and the United States. ATI common shares trade on NASDAQ (ATYT) and the Toronto Stock Exchange (ATY).

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