ATI To Acquire NxtWave Communications; Key set-top chipset technology to provide complete solutions for customers.

Business/Technology Editors

MARKHAM, Ontario--(BUSINESS WIRE)--June 12, 2002

ATI Technologies Inc. (TSE:ATY) (NASDAQ:ATYT) announced today that it has entered into an agreement to purchase NxtWave Communications Inc. for (US) $20 million cash. The purchase agreement is subject to customary closing conditions and the satisfaction of certain legal conditions. The transaction is expected to close on June 28, 2002.

A privately held company, NxtWave Communications is an acknowledged technology leader in delivering broadband communications silicon using proprietary digital signal processing technologies adapted for applications in digital terrestrial and cable receivers. The acquisition of NxtWave Communications will broaden ATI's set-top box product portfolio to include demodulation technology in the front end communications, in addition to its back end solutions with ATI's XILLEON(TM) products. The addition of NxtWave's technology will enable ATI to offer highly integrated chipsets to set-top customers providing lower cost and greater functionality.

"The acquisition of NxtWave Communications is an essential part of ATI's growth strategy for our set-top business," said Dave Orton, President & Chief Operating Officer, ATI Technologies Inc. "ATI has already secured significant partnerships and design wins with major set-top manufacturers including Pace Micro Technology and Scientific-Atlanta. The addition of NxtWave's technology will enable ATI to provide continued innovation to our customers and accelerate our growth in this space."

"ATI has a great long-standing working relationship with NxtWave Communications and our two products are a natural fit for the set-top market," said Adrian Hartog, Senior Vice President & General Manager, Consumer Products Group, ATI Technologies Inc. "Customers will have immediate access to the combined offering of ATI's widely recognized XILLEON set-top chipset and NxtWave's industry leading products - providing customers with a 'one-stop shop' for the entire set-top solution. This strategic acquisition gives ATI the unique capability to offer customers competitive solutions that shorten customers' time to market and reduce system cost."

NxtWave delivers advanced broadband receiver technologies, based on a world-class development team, including support for digital terrestrial COFDM and VSB broadcast formats, and the cable QAM format. For example, NxtWave's NXT2005 DTV Cable Transceiver and Terrestrial Receiver is designed for a variety of applications including cable digital television receivers and set-top boxes where cost and industry leading performance are critical factors. ATI's XILLEON groundbreaking design integrates a high speed MIPS(R) CPU, graphics, video, audio, conditional access, USB, EIDE, PCI, memory controller, and a host of other I/O capabilities that will combine with NxtWave technology to deliver a strategically advantageous solution for set-top customers.

"NxtWave's commitment to develop quality broadband communications integrated circuits will go hand-in-hand with ATI's dedication to deliver industry leading set-top chipset technologies," said Geoff Phillips, Chief Operating Officer, NxtWave Communications. "ATI will offer customers the benefits of set-top technologies from two separate companies now delivered from one company as a unified solution."

    Financial details of this acquisition will include:

    --  ATI gaining approximately 55 new employees of which 50 are
        engineers;

    --  Additional expenses of approximately (US) $2 million per
        quarter;

    --  Mildly dilutive to earnings in fiscal fourth quarter of 2002;
        and

    -- Accretive to earnings by mid 2003.

ATI will host a conference call today to discuss the acquisition of NxtWave Communications at 8:45 AM EDT. To participate in the conference call, please dial 416-695-5806 ten minutes before the scheduled start of the call. A replay of the call will be available through June 19, 2002 by dialing 416-695-5800 with the pass code 1183181.

Company Background

NxtWave Communications Inc. (www.nxtwavecomm.com), offers the highest performing integrated circuit solutions satisfying the requirements of manufacturers of digital set-top boxes, digital TVs, PC TVs and other broadband appliances through the company's efficient and robust modulation and demodulation techniques. NxtWave's products provide error-free digital transmissions, even with severe signal impairments commonly present in cable and terrestrial broadcast systems. The company's exclusive technology gives manufacturing customers and consumers significant cost and performance advantages.

ATI Technologies Inc. is a world leader in the design and manufacture of innovative 3D graphics and digital media silicon solutions. An industry pioneer since 1985, ATI delivers leading-edge performance solutions for the full range of PC and Mac desktop and notebook platforms, workstation, set-top box, game console and handheld markets. With 2001 revenues in excess of US $1 billion, ATI has more than 1,900 employees in the Americas, Europe and Asia. ATI common shares trade on NASDAQ (ATYT) and the Toronto Stock Exchange (ATY).

This press release contains forward-looking statements that involve risks and uncertainties. Actual results may be materially different from those contained in such forward-looking statements. The markets for the Company's products are characterized by rapidly changing technology, evolving industry standards, frequent new product introductions, emerging competitors and significant price competition. In the event that the Company is unsuccessful in identifying, developing, manufacturing or marketing new products or enhancing its existing products or maintaining its historic prices or margins, its operating results will be adversely affected. Additional information concerning factors that could cause actual results to materially differ from those in such forward-looking statements is contained in the Company's filings with securities regulatory authorities. ATI disclaims any obligation or intention to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Copyright 2002 ATI Technologies Inc. All rights reserved. ATI and ATI product and product feature names are trademarks and/or registered trademarks of ATI Technologies Inc. All other company and product names are trademarks and/or registered trademarks of their respective owners. Features, pricing, availability and specifications are subject to change without notice.

For Information:

John Swinimer, Public Relations Manager, Consumer Products

[phone], Ext. 8456 or [e-mail]

For media or industry analyst support, visit our Web site at http://www.ati.com

Other ATI Contacts:

Pedro Cabezuelo, Senior Counsellor, BenchMark Porter Novelli, at [phone] or [e-mail]

For investor relations support, please contact:

Janet Craig, Director, Investor Relations, ATI Technologies Inc., at [phone], Ext. 2631 or [e-mail]

                         ATI TECHNOLOGIES INC.
                     1 Commerce Valley Drive East
                    Markham, Ontario Canada L3T 7X6
                       Telephone: [phone]
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                              www.ati.com