ATI today announced that revenues for the third quarter of fiscal 2005 are expected to be about $ 530 million(1), approximately 5% below the low end of the revenue range provided on March 24, 2005. While we believe end-user demand remains stable, a product mix shift in the quarter towards the lower end of the desktop and notebook discrete market caused revenues to come in below expectations. The product mix shift towards the lower end of the desktop and notebook discrete market contributed to a decline in gross margin for the quarter. In addition, gross margin was impacted by our desktop IGP products, which have margins that are well below the corporate average. Lower than anticipated yields on certain products due to operational issues in the packaging and test area of the manufacturing process, also negatively impacted gross margin.

ATI today announced that revenues for the third quarter of fiscal 2005 are
expected to be about $ 530 million(1), approximately 5% below the low end of the
revenue range provided on March 24, 2005. Gross margin is expected to be
approximately 29%. Operating expenses, excluding the costs associated with
stock-based compensation, are expected to be about $ 143 million.

Broad-based demand for our products led to unit growth of approximately 5% in
our overall PC business despite the typical seasonal weakness seen in the third
quarter relative to the second quarter. While we believe end-user demand remains
stable, a product mix shift in the quarter towards the lower end of the desktop
and notebook discrete market caused revenues to come in below expectations. Our
desktop IGP business exceeded expectations, growing dramatically in the quarter.
Revenues from our consumer business – which includes DTV and handset – were
within expectations.

The product mix shift towards the lower end of the desktop and notebook discrete
market contributed to a decline in gross margin for the quarter. In addition,
gross margin was impacted by our desktop IGP products, which have margins that
are well below the corporate average. Lower than anticipated yields on certain
products due to operational issues in the packaging and test area of the
manufacturing process, also negatively impacted gross margin.

Looking into the fourth quarter of fiscal 2005 and into fiscal 2006, we continue
to see opportunities for growth. Based on our traction in the high growth
markets of DTV and handset, our expanding footprint in desktop IGP, as well as
continued strength in our core PC discrete market, we expect revenues for the
fourth quarter of fiscal 2005 to be about $ 600 million.

ATI will report its fiscal 2005 third quarter financial and operating results on
June 23, 2005. We will provide additional information, including a more detailed
quarterly review and outlook, during our regularly scheduled conference call on
that date.