Competitive ATI chief prepares to take bigger bite of chip market
South China Morning Post
Tuesday, March 23, 1999
MAXWELL LEVESON in Toronto
When I met him, ATI Technologies founder and chief
executive K.Y. Ho had chips on the brain, and not
only the kind that go into a computer. "I chipped my
tooth a few weeks back," he explained with a smile. "I
had to run to the dentist this afternoon to get it fixed."
But chips, specifically graphics accelerator chips,
have been almost all Mr Ho has thought about lately.
Last year was a banner year for ATI, the Canadian
supplier of computer graphics hardware, which
surpassed C$1 billion (about HK$5.1 billion) in
revenue - a sales increase of 92 per cent from the
previous financial year.
ATI's products, such as the Rage 128 chip, are used
by all major PC makers.
Sun Microsystems recently began using ATI chips -
which boost speed, resolution and smoothness of
digital animation and video - in its Unix workstations.
ATI also has dislodged S3 to claim top position in the
graphics-chip sector, boosting its market share to 27
per cent, from 15 per cent the year before.
Recently named one of the year's top 25 executives
by BusinessWeek magazine, Mr Ho was born to a
poor family in Guangdong province in 1951. He
began selling handmade craft items and cigarette
papers in the streets when he was seven, and grew
vegetables to sell at the local market on weekends.
"The rolling papers did really good business," Mr Ho
recalled. "I made a very high profit. But I think selling
vegetables at the market was what taught me how to
be a good negotiator!"
He earned a degree in electrical engineering at
Cheng Kung University in Taiwan before coming to
Hong Kong in the early 1970s to start his career.
"I moved around quite a bit. I worked at Control Data,
Data Product, National Semiconductor, Phillips. Every
time I changed jobs, I changed departments," he said.
"I learned to wear many hats, and this helped me out
a lot when I started ATI."
Even as he climbed the ladder in companies he
worked for - his last job in Hong Kong was as general
manager of circuit-board-maker Wong's Electronics -
the lure of being his own boss was calling.
"It was always tough to choose between a stable job
with good pay and starting your own business," he
said.
Mr Ho started some businesses in Hong Kong, mostly
trading consumer goods, none of which were
successful, though he managed to avoid significant
losses.
He founded ATI in 1985, soon after moving to
Canada. "People often ask me why I started ATI and
they never believe me when I tell them it was because
I didn't have a job," he said.
ATI's early days were "lean and mean". Its first
product was a graphics board, the Graphics Solution,
that combined the several different monitor standards
then in use.
Mr Ho did everything and anything that needed
doing. "When you are running a small business, you
are the president but you are also the janitor," he
said.
One of the greatest challenges was developing the
company's reputation. "Everyone wants to work with
big, established companies," he said. "The banks
didn't want to give us credit. They all asked: 'Who's
ATI?' "
This prevented ATI from growing fast. "The seed was
there for many years, but ATI was unable to capitalise
on opportunities," he said. "For example, in 1987,
during the memory shortage, we couldn't get any
chips [to build its graphics boards]. We had tonnes of
orders we couldn't fill."
In spite of such obstacles, ATI reached the top three
in the graphics industry by the late 1980s.
Many industry analysts have described Mr Ho as
being intensely competitive, even aggressive. He
makes no excuses for his business philosophy.
"Business is like war. You can't surrender, not even
an inch. Every day is a battle, and we want to win," he
said.
But he was quick to point out that outside office hours
ATI, with more than 1,700 employees, was more like a
big family than a conquering army.
While his military posturing might seem hyperbole,
the battle metaphor in many ways accurately reflects
the current state of the graphics-chip industry.
Most analysts agree the sector is too crowded, with
far too many vendors - more than 40 by some
estimates - for the market to sustain. Even the mighty
Intel has entered the fray with its i740 graphics chip,
although so far its sales are a distant third behind ATI
and S3.
Over-saturation has led to numerous consolidations
as the bigger players swallow up smaller ones. In
October, ATI itself acquired Chromatic Industries, a
one-time rival that had fallen on hard times.
ATI also may have its dominance threatened by the
resurgence of S3, the former market leader, which
stumbled in 1997 when it failed to effectively adopt
Intel's Accelerated Graphics Port (AGP) 2X graphics
standard for new products.
S3 is not yet ready to fly the white flag. In December,
it announced a 10-year technology cross-licensing
deal with Intel, which gives it key patents. It also won
a large number of customers for its leading-edge
Savage4 graphics chip, which uses Intel's upcoming
AGP4 standard.
Amid these challenges, Mr Ho is quietly confident. For
this year, he has set ATI's sights on the mobile
computing market. "I want ATI to be number one in
market share in notebooks this year," he said.
Regards,
MArc
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