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Technology Stocks : ATI Technologies in 1997 (T.ATY)

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To: Marc who wrote (4724)12/11/1999 11:44:00 AM
From: Marc  Read Replies (1) of 5927
 
12/10/99 - ATI making its mark in set-tops

Dec. 10, 1999 (Electronic Buyers News - CMP via COMTEX) -- Silicon Valley- ATI Technologies
Inc. today will sample the Rage SDTV and Rage HDTV, which combine PC-like graphics with
digital video.

Like other companies, ATI has integrated its new chips into a reference design with help from
vendors such as Texas Instruments Inc. and Quantum Effect Design Inc., a designer of
MIPS-compatible embedded cores.

But while its rivals work to secure the communications blocks within the design, analysts note
that graphics may prove to be ATI's differentiating feature.

Analyst Gerry Kaufhold of In-Stat Group, Scottsdale, Ariz., noted that the proliferation of the
OpenCable standard from CableLabs has opened the market to many more OEMs, placing
them in a high-speed race to differentiate themselves, often in fast HTML, and possibly in 3D
rendering.

While rivals such as Broadcom Corp. and Conexant Systems Inc. have made forays into the
set-top-box graphics space, "[they] are more proficient on the graphics side," Kaufhold said. "In
pure graphics rendering, ATI has an edge."

As the name suggests, ATI's Rage SDTV chip decodes standard-definition digital video such as
that used by the European Digital Video Broadcast format of 720x480 or 720x525. ATI's HDTV
chip supports all 18 North American ATSC formats, with resolutions reaching up to 1,920x1,080.

The chips are designed for digital video and integrate a transport demultiplexer; ATI's existing
Rage Theater chip processes analog video streams. Both the Rage SDTV and HDTV use a
modified version of the Rage 128 graphics chip and are available with a TI DOCSIS-compatible
cable modem. A terrestrial VSB demodulator will also be available.

While ATI's communications-centric rivals have moved to tie their components tightly together,
the company's internally designed demux capability unifies the system memory, stealing a page
from PC design. Through a technique called "adaptive compression," ATI can process 32-bit
color graphics, perform MPEG-2 decoding, and carry out transport demultiplexing with as little
as 8 Mbytes of system memory and still result in minimal quality loss.

"We're really trying to bring the price point down to an affordable level," said Dan Eiref, director
of set-top-box marketing at ATI, Thornhill, Ontario. "We're helping to bring down the final price of
the box to $299 retail, and thus make it a consumer device."

Because ATI has also licensed the MIPS Technologies Inc. core, the CPU will likely be
integrated at a later date. Other observers noted that, over time, set-top functions will tend to
collapse into the most valuable components, restricting the total dollar value of set-top
semiconductor content. But for a video-oriented set-top box, is graphics all that important?

Definitely, Kaufhold said. "Take a look at the importance of on-screen programming guides," he
said, "and you'll notice that the guides have really improved, and it's one way to differentiate
yourself from the competition."

ATI's new Rage HDTV and SDTV chips allow an infinite number of hardware graphics planes,
with alpha blending on a per-pixel basis for on-screen effects. The SDTV will ship for $25 and the
HDTV for $30 in lots of 100,000 when production begins in the first half of 2000.

-0-

By: Mark Hachman
Copyright 1999 CMP Media Inc.
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