ATI Technologies Inc. announces investment in foundry joint venture.

THORNHILL, ONTARIO--(BUSINESS WIRE)--Sept. 13, 1995--ATI TECHNOLOGY (TSE:ATY) ATI Technologies Inc. today announced it has entered into definitive agreements with United Microelectronics Corporation ("UMC") and other joint venturers to form a separate Taiwanese company for the purpose of building and managing a semiconductor manufacturing facility in the Science Based Industrial Park in Hsin Chu City, Taiwan, Republic of China.

The facility is expected to commence production of eight inch wafers using UMC advanced sub-micron semiconductor manufacturing processes in the last half of 1997. Under the terms of the Foundry Venture Agreement, UMC will transfer to the new venture its 0.5, and when developed, its 0.35 and 0.25 sub-micron processing technologies on a royalty-free basis. Pursuant to the agreement the joint venturers are expected to use a significant portion of the capacity of such facility for the manufacture of their respective proprietary products. The agreement also allows the participation of other venturers on the same terms.

It is presently contemplated that the manufacturing facility will, over time, require in excess of USD $1 billion to complete its construction and finance its operations. ATI will continue USD $30 million, and will own 5 percent of the equity in the venture. The investment amount will be paid in cash by ATI in three installments over the next two years, timed to coincide with the expected building and equipment costs involved. UMC, its affiliates and members of the Taiwan financial community are expected to provide, over time, the remainder of the capitalization.

A portion of equity contribution is expected to come through the grant by UMC to the new entity of a royalty free license under the UMC sub-micron process technologies for use in the facility. The venturers have the right to elect two representatives to the board of the new entity, and UMC and its affiliates have the right to appoint a majority of the board. Formation of the entity and the parties' obligations to proceed are subject to a number of conditions including arranging the necessary debt financing and obtaining requisite government approvals.

In addition to the above arrangements, UMC entered into commitments to provide each of the Venturers interim capacity to help meet their needs during the construction and initial production phases of the facility.

Robert H.C. Tsao, UMC's Chairman stated: "This foundry venture follows closely upon the first venture we announced last month. UMC continues to believe that these foundry ventures combine some of the most innovative design talent of Silicon Valley with the most efficient fabrication operation in Taiwan. I believe these foundry ventures will prove to be among the most successful models for the present and well into the future."

"Investing in this foundry project is one of several steps that ATI is taking to secure its share of world-wide foundry capacity for the future benefit of its customers" said K.Y. Ho, President and CEO of ATI. "This investment will also increase ATI's access to existing foundry capacity in fiscal 1996 and beyond."

Corporate Profiles

United Microelectronics Corporation, is a leader in the design and manufacture of integrated circuits in Taiwan with headquarters in the Science Based Industrial Park in Hsin Chu City, Taiwan, Republic of China.

ATI Technologies Inc. designs and manufactures products for the Intel-compatible personal computer and Apple PCI Power Macintosh markets. These products include graphics accelerators and components, communications products, and video hardware and software. ATI employs over 600 people worldwide and has a product line that is sold through an international network of computer manufacturers and leading computer distributors.

CONTACT: Barbara Wilcox, [phone] ext. 8306