ATI reports record revenues of US $572.2 million in Q4

(Auszug aus der Pressemitteilung)

MARKHAM, ON – October 7, 2004 – ATI Technologies Inc. (TSX: ATY, NASDAQ: ATYT) today

announced its second consecutive record revenue quarter, driven by sales increases in both the personal
computer and consumer product lines.

ATI reported revenues of $572.2 million for the fourth quarter of fiscal 2004 (ended August 31, 2004),
a 50.3% increase over the fourth quarter a year earlier. Gross margin declined 1.8 percentage points to
33.8% over the same period of the previous year as a result of costs associated with the ramp of a
number of new desktop products. Net income per share was $0.24 for the quarter compared to $0.09
last year. ATI’s cash position increased $40.9 million during the quarter to $548.9 million as of August
31, 2004.

ATI’s fiscal 2004 annual results also produced significant revenue and earnings growth over fiscal 2003.
Revenues for the full 2004 fiscal year grew 44.1% to $2.0 billion. Net income for the year increased
nearly six-fold to $0.80 per share from $0.14 per share in fiscal 2003.

“Our corporate strategy continues to produce returns,” said David Orton, ATI’s Chief Executive Officer.
“Our PCI Express desktop product line-up is the most competitive product family on the market,
resulting in tremendous customer acceptance. In addition, the growth rate of our digital consumer
business continues to outpace the market, based on ATI’s innovative products for use in cell phones and
digital televisions.”

We expect our leadership in graphics and multimedia technologies for both digital consumer products
and PCI Express-based PCs to continue driving growth for ATI in fiscal 2005. As a result, ATI
currently expects revenue for the first quarter of fiscal 2005 to be in the range of $600 to $640 million.
Gross margin, as a percentage of revenues, is expected to be between 33 and 34%. Operating expenses
in the first quarter (excluding the expensing of stock options) are expected to grow between 5 and 10%
relative to the fourth quarter of fiscal 2004. In accordance with Canadian generally accepted accounting
principles, beginning with the first quarter of fiscal 2005, ATI will expense compensation costs
associated with stock options granted to employees after September 1, 2002. The charge in the first
quarter of fiscal 2005 will be approximately $7.0 million.

ATI continues to be optimistic about its outlook for fiscal 2005, but anticipates some seasonality, where
the first quarter is strong, followed by a slightly weaker revenue and profit profile for the second and
third quarters. The fourth quarter is expected to build off of the third quarter.

Financial Results Analysis

Fourth quarter revenues of $572.2 million grew by 50.3% from $380.7 million in the same period a year
ago. The gains in the fourth quarter were largely driven by revenue increases in all of our main business
lines. Desktop discrete chip revenues grew about 40% as a result of PCI Express business with OEMs
and expanded sales in the add-in-board (AIB) channel. Total notebook chip revenues (integrated and
discrete) increased almost 20% resulting from market growth that was partially offset by market share
declines in the notebook integrated market. Handset chip revenues more than doubled for a number of
reasons — increased demand from cell phone manufacturers, a growing number of design wins, a
growing cell phone market overall, and the increasing proportion of the market claimed by camera
phones. Our digital television revenues grew dramatically based on market growth and continued
penetration of our products among top digital TV manufacturers.

Gross Margin
Our gross margin for the fourth quarter of fiscal 2004 was 33.8% — down 1.8 percentage points from
35.6% in the same period a year ago. The margin for our desktop discrete products declined relative to
the fourth quarter of the previous year primarily due to early production costs associated with the
introduction and ramp of our new PCI Express products. Gross margin for the fourth quarter of fiscal
2003 also benefited from higher margins in desktop discrete. The overall margin decline of our PC
products was slightly offset by increases in our consumer products, which have margins that are
typically higher than our corporate average.

Our royalty income from Nintendo, and our non-recurring engineering revenues, are reported under
“Other” in our segmented reporting. Please see Note 11 to our unaudited consolidated interim financial
statements for further information on our segmented reporting.

Operating Expenses
Selling and marketing expenses increased by 10.6% year-over-year to $30.5 million. The increase in
expenses related primarily to increased staff for sales and technical sales support, an increased
investment in advertising designed to improve ATI’s brand awareness and to create demand in the PC
market, as well as increased marketing activities to support our brands, product launches, and
participation in industry trade shows.

Administrative expenses were up 11.3% year-over-year to $11.7 million due to increased staffing levels
to support a growing business, and incentive-based compensation.

Research and development expenses increased 25.8% year-over-year to $77.1 million. This increase
was largely a result of additional headcount to support broader programs in growing business areas, and
increased prototyping costs – primarily in the desktop, integrated and notebook business units. These
efforts have led to a number of design wins which we believe will result in continued growth in our
business. Higher costs associated with licensing fees also added to the increase in R&D.

Other Charges
We recorded other charges totaling $0.2 million in the fourth quarter. This compares favorably to other
charges of $10.4 million for the fourth quarter last year. Last year’s charges related largely to the
settlement of patent litigation and restructuring charges related to the closure of our European R&D
operations. Please see Note 8 to our unaudited consolidated interim financial statements for further

Total Operating Expenses
Our total operating expenses reflect the operating expenses detailed earlier, as well as amortization of
intangible assets. For further information on the treatment of the amortization of intangible assets, please
see Note 4 to our unaudited consolidated interim financial statements.

Interest and Other Income
Our interest and other income was $2.8 million in the fourth quarter of 2004, compared with $0.7
million for the comparable period in fiscal 2003. Interest and other income in 2004 was derived
principally from interest on our higher cash balances.

Net Income
Net income almost tripled to $61.2 million in the fourth quarter of 2004 from $22.3 million in the same
quarter last year as a result of the significant increase in sales.

Liquidity and Financial Resources
Fourth quarter inventory levels were steady relative to the third quarter of 2004 at $254.9 million.
Inventory is up 44.4% since the end of the last fiscal year, August 31, 2003. The increase relative to
August 31, 2003 is a direct result of our substantially increased sales.

Accounts receivable were up 55.9% to $365.6 million from the year ended August 31, 2003. Accounts
payable are up 43.7% to $274.8 million from the year ended August 31, 2003. Both accounts receivable
and accounts payable are within our target range for current sales levels.

Deferred revenue for the fourth quarter was $29.1 million, a decrease of $0.2 million from the third
quarter and down $8.5 million from the end of fiscal 2003. Deferred revenue primarily relates to
payments associated with development contracts where revenue is recognized on a percentage of
completion basis, but payments are made according to contract terms.

As of August 31, 2004 we had working capital of $694.7 million compared to $430.3 million at August
31, 2003. Cash flows from operations were $35.9 million in the fourth quarter. Our cash position was
$548.9 million at the end of the fourth quarter, up from $350.7 million at the end of fiscal 2003. Our
cash position increased mainly as a result of increased earnings throughout the fiscal year.