Microsoft and ATI Technologies Announce Technology Development Agreement

REDMOND, Wash., Aug. 14, 2003 — Microsoft Corp. (Nasdaq
“MSFT” ) today announced it has entered into a technology development agreement with ATI Technologies Inc. (TSX: ATY, NASDAQ: ATYT). Under the agreement, ATI is developing custom, leading-edge graphics technologies for use in future Xbox®
products and services.

“We’re combining Microsoft’s vision, software experience and R & D resources with ATI’s pioneering leadership in graphics technologies to create innovative future Xbox products and services that meet the lifestyle needs of consumers in the Digital Decade,”
said Robbie Bach, senior vice president of the Home and Entertainment Division at Microsoft.
“We selected ATI after reviewing the top graphics technologies in development and determining that ATI’s technical vision fits perfectly with the future direction of Xbox.”

“Microsoft shares our passion for cutting-edge innovation,”
said K. Y. Ho, chairman and chief executive officer, ATI Technologies Inc.
“Our success working with Microsoft in the past gives us great confidence as we move forward, and our broad experience and wealth of engineering resources will ensure that we deliver. This agreement cements ATI’s position as the prime graphics supplier for the future of the games industry.”

About ATI Technologies Inc.

ATI Technologies Inc. is a world leader in the design and manufacture of innovative 3-D 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 delivering 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 markets. With 2002 revenues in excess of U.S. $1 billion, ATI has more than 2,000 employees in the Americas, Europe and Asia. ATI common shares trade on Nasdaq (ATYT) and the Toronto Stock Exchange (ATY).

About Xbox

Xbox ( ) is Microsoft’s future-generation video game system that delivers the most powerful games experiences ever. Xbox empowers game artists by giving them the technology to fulfill their creative visions as never before, creating games that blur the lines between fantasy and reality. Xbox is now available in the continents of North America, Europe, Asia and Australia.

About Microsoft

Founded in 1975, Microsoft (Nasdaq
) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

Microsoft and Xbox are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

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