ATI TO AQUIRE ARTX
February 16, 2000

ATI gains:

-- Increased stake in the e-appliance market including game consoles

-- Key business with Acer, Nintendo, and Matsushita

-- An integrated PC graphics chipset with hardware-accelerated T&L

ATI Technologies Inc. today announced it has entered into a definitive agreement to acquire ArtX, Inc. of Palo Alto, California, a leading developer of high-performance graphics for both PCs and consumer appliances, for approximately $400 million payable in ATI common shares and options.

The acquisition moves ATI categorically into the consumer electronics appliance (or e-appliance) market adding key technologies for consumer devices including game consoles. ArtX designs and develops graphics solutions for high-performance PCs and e-appliances including DVD players and Internet terminals. Furthermore, ArtX is the provider of graphics technologies for Nintendo's Project Dolphin.

"This acquisition accelerates the implementation of our longer-term strategic plan to be a key supplier to both the PC and consumer electronics industries," said KY Ho, Chairman and CEO of ATI, "Our reach now encompasses all major types of e-appliances including set-top boxes, game consoles, and video playback devices."

"Combining ArtX's innovative graphics expertise in the consumer appliance markets with ATI's distribution, manufacturing and supply know-how in the PC market is an unbeatable combination," said Dave Orton, President and CEO of ArtX, Inc. "Moreover, we quickly enhance and amplify two major initiatives evoked by ATI - developing high-performance integrated and e-appliance solutions."

"We are pleased to see two such respected companies join forces," said Hiroshi Yamauchi, President of Nintendo Co., Ltd. "We strongly endorse their union and expect a continuance of the industry-leading graphics products each are noted for."

The transaction, which is expected to close in approximately four weeks, is subject to the customary regulatory approvals including Hart-Scott-Rodino notification. ATI will acquire 100% of the outstanding common shares and options of ArtX for approximately $400 million to be paid in 24.6 million common shares and 8.0 million options of ATI at closing. The acquisition is expected to be slightly accretive to ATI in earnings per share in fiscal 2001 and accretive to the Company by approximately ten to 15 cents for fiscal 2002.