Funai Chooses ATI for First Set-top Box to Feature Innovative Smart Antenna Technology and Amazing Visual Quality.

MARKHAM, Ontario -- Set-top box for North America receives over-the-air TV signals

ATI Technologies Inc. (NASDAQ:ATYT)(TSX:ATY) announced today that Funai Electric Co., Ltd., of Japan, has chosen XILLEON(TM) 226 and NXT2004(TM) for its new STB400E set-top box solution. This set-top box is the first to feature Smart Antenna technology which allows easy reception of over-the-air broadcast signals using NXT2004 technology to electronically (not physically) reposition the antenna for best reception. Funai's products are sold under well-known brand names such as Emerson, Sylvania, and Symphonic. The Funai STB400E set-top box will be available in the United States later this year.

Funai chose ATI's unique digital TV solutions based on the technical advantages of Smart Antenna technology and its attractive features for consumers.

"As the world leader in TV products, FUNAI demands exceptionally high quality components for our consumer electronics products and we recognize ATI as a world leader in DTV reception and display technologies," said Takehiro Onomatsu, Manager of Digital TV project, Funai Electric Co., Ltd. "Funai chose ATI based on the company's expertise in signal reception through Smart Antenna combined with exceptional visual quality plus deinterlacing functionality found in the industry-leading XILLEON 226."

In addition to being an active member of the Consumer Electronics Association, ATI was involved in the committee that created the CEA-909 Smart Antenna standard. CEA-909 describes an antenna control interface for receiving free-to-air digital television broadcasts whereby the receiver controls the antenna to automatically optimize the signal for best reception by eliminating manual antenna position adjustments. ATI was the first company to embed Smart Antenna hardware and software in products for antenna control. ATI worked closely with the first antenna and set-top manufacturers to make this technology a reality.

Funai's set-top box includes the world's first CEA-909 Smart Antenna controller via ATI's NXT2004 receiver chip. With the extra benefit of ATI's Smart Antenna embedded algorithms, technology designed into the Smart Antenna allows the electronic repositioning of the antenna to accurately pinpoint the desired signal.

"ATI is proud to power this truly unique Funai STB400E set-top box - the world's first consumer electronics device to feature the revolutionary Smart Antenna technology," said Daniel Eiref, director of marketing, DTV group, ATI Technologies Inc. "Funai customers will benefit from great signal reception thanks to the combination of ATI's NXT2004 chipset and Smart Antenna technology, matched with the extraordinary video quality of ATI's XILLEON 226."

The Funai STB400E set-top box features easy operation with one button quick response operation. The set-top box includes component video output or DVI output with composite video output simultaneously. HD video signals are supported from the analog component output port or the DVI (support HDCP) output port. The device can simultaneously issue HD output and composite video output for recording content to the DVD recorder. The STB400E also supports electronic program guides allowing users to view their broadcast while browsing for future shows.

XILLEON 226 integrates into a single chip all the processing, graphics, video, audio, and I/O (input and output) capabilities needed in a set-top box or digital TV. Included are a 300MHz MIPS(R) CPU (central processing unit), dual-HD (high definition) capable MPEG decoder, audio decoder, dual display engine, 2D and 3D graphics engine, conditional access, transport demultiplexers, PCI (Peripheral Component Interconnect), USB (universal serial bus), and hard disk drive interfaces. XILLEON 226 also features spatial-temporal adaptive deinterlacing to ensure the highest quality video output.

The NXT2004 VSB/QAM (vestigial side band/quadrature amplitude modulation) Receiver is designed for a variety of applications including off-air and digital cable television receivers, set-top boxes, PCDTV and datacast applications where cost, low power and industry leading performance are a must. The NXT2004 VSB/QAM Demodulator is configurable to work in either the ATSC compliant 8 VSB mode for terrestrial broadcasting or in the ITU-J.83B/SCTE DVS-031 compliant 64 QAM or 256 QAM modes.

About Funai

Funai Electric Co., Ltd., established in 1961, is headquartered in Osaka, Japan and is listed in the First Section of the Tokyo Stock Exchange and the Osaka Securities Exchange (6839). In addition to the consumer electronic product brands sold by FUNAI Corporation and the products sold by other FUNAI sales and marketing companies in Asia and Europe; Funai Electric Company, Ltd. is a major original equipment manufacturer (OEM) supplier for appliances, consumer electronic products, printers and digital still cameras on a global basis.

About ATI Technologies

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 is the world's foremost visual processor unit (VPU) provider and is dedicated to deliver leading-edge performance solutions for the full range of PC and Mac desktop and notebook platforms, workstation, set-top and digital television, game console and handheld device markets. With 2004 revenues in excess of US $2 billion, ATI has more than 2,700 employees in the Americas, Europe and Asia. ATI common shares trade on NASDAQ (ATYT) and the Toronto Stock Exchange (ATY).

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