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Technology Stocks : ATI Technologies in 1997 (T.ATY) -- Ignore unavailable to you. Want to Upgrade?

To: Marc who wrote (3617)	6/28/1999 2:23:00 PM
From: DiViT	Respond to of 5927

Graphics chip leader ATI pushes into new markets news.com By Reuters Special to CNET News.com June 28, 1999, 9:55 a.m. PT TORONTO--ATI Technologies chief executive K.Y. Ho is steering his company down new avenues, much like a player driving a virtual race car along the unfamiliar roads in the video games powered by ATI's market-leading graphic chips. In recent years, most of the world's big computer makers have turned to ATI for components that create rich, crisp pictures for games and other applications. ATI had a whopping 30 percent of the total graphics chip market in the first quarter of 1999, up from 11 percent in 1996, the company said. It is growing so quickly that it is putting up a four-story building next to its head office in Thornhill, north of Toronto, to help consolidate its scattered work force. But even if ATI won all of its rivals' market share, its expansion would be limited by the pace of the industry overall, Ho noted. This is prompting him to take the company he co-founded in different directions. "Sooner or later, you eat up their market share. Where can you grow?" Ho said in an interview with Reuters. "The best you can do is [match the] industry growth rate. "So you need to expand to different market segments," he said, speaking over the rumble of construction equipment next door. One looming obstacle is an industry trend to put all of a computer's functions on one processor, which will cut back on the current sales of standalone chips and components that form the bulk of ATI's business, said analyst Dean McCarron of Mercury Research in Arizona. This trend "ultimately reduces the size of the standalone graphics market," McCarron said. However, "because ATI is diversifying, it can mitigate circumstances." Pushing into TV set-tops Ho and his researchers are developing parts for the TV set-top box, a device that sits on a television and allows it to be used to watch TV shows, as a digital VCR, to browse the Web, play computer games and other applications. ATI's first achievement in this area was last year's contract for components from U.S. digital cable systems firm General Instrument Corporation, worth $187 million over three to five years. Ho expects at least two more such contracts, but would not say when. "We definitely have other deals," he said. ATI is also banking on the increasing sophistication of consumer products. Ho says that many consumers don't realize that computer chips already inhabit their microwave ovens, digital VCRs, and more. Sooner or later, these products will include a graphic interface such as a face on a microwave screen that tells you how long to cook certain items. At the same time, ATI continues to push ahead its core business, with plans to persuade two more laptop computer makers to buy its products. ATI now has all 10 of the top desktop makers and eight of the top 10 laptop makers sewn up as clients. The two holdouts, Toshiba and IBM will use ATI components by year-end, he predicts. "We want them to be our customers," Ho said. "I absolutely won't give up."