AMD and ATI to Create Processing Powerhouse; $5.4 Billion Acquisition Will Drive Growth, Innovation and Choice; AMD and ATI to Hold Joint Executive Conference Call Today at 8:00 a.m. EDT

AMD (NYSE:AMD) and ATI (NASDAQ:ATYT) (TSX:ATY) today
announced plans to join forces in a transaction valued at
approximately $5.4 billion. The combination will create a processing
powerhouse by bringing AMD's technology leadership in microprocessors
together with ATI's strengths in graphics, chipsets and consumer
electronics. The result: A new and more formidable company, determined
to drive growth, innovation and choice for its customers, particularly
in the commercial and mobile computing segments and in the
rapidly-growing consumer electronics market. Combining technologies,
people, and complementary strengths, AMD plans to deliver in 2007
customer-centric platforms for the benefit of customers who want to
collaborate in the development of differentiated solutions.
AMD's acquisition of ATI will position the new company to deliver
innovations that fulfill the increasing demand for more integrated
solutions in key market segments while also continuing to develop
"best-of-breed" discrete products that empower customers to choose the
combination of technologies that best serves their needs. In 2008 and
beyond, AMD aims to move beyond current technological configurations
to transform processing technologies, with silicon-specific platforms
that integrate microprocessors and graphics processors to address the
growing need for general-purpose, media-centric, data-centric and
graphic-centric performance. Thus, the combined company intends to
empower its customers to create their own unique products and
solutions within an open-innovation ecosystem free from artificial
barriers to customer success.
"ATI shares our passion and complements our strengths: technology
leadership and customer centric innovation," said AMD Chairman and CEO
Hector Ruiz. "Bringing these two great companies together will allow
us to transcend what we have accomplished as individual businesses and
reinvent our industry as the technology leader and partner of choice.
We believe AMD and ATI will drive growth and innovation for the entire
industry, enabling our partners to create differentiated solutions and
empowering our customers to choose what is best for them."
"This combination means accelerated growth for ATI, and broader
horizons for our employees," said Dave Orton, President and CEO of
ATI. "All of our product lines will benefit. Joining with AMD will
enable us to innovate aggressively on the PC platform, and continue to
invest significantly in our consumer business to stay in front of our
markets."
"Windows Vista will deliver incredible advances in the user
experience as a result of advancements in graphics integration and
performance," said Jim Allchin, Co-President of Microsoft's Platforms
& Services Division. "We're excited by the potential of what AMD and
ATI can deliver together to enhance the Windows Vista experience for
our customers even further."
Under the terms of the transaction, AMD will acquire all of the
outstanding common shares of ATI for a combination of $4.2 billion in
cash and 57 million shares of AMD common stock, based on the number of
shares of ATI common stock outstanding on July 21, 2006. All
outstanding options and RSUs of ATI will be assumed. Based upon the
closing price of AMD common stock on July 21, 2006 of $18.26 a share,
the consideration for each outstanding share of ATI common stock would
be $20.47, comprised of $16.40 of cash and 0.2229 shares of AMD common
stock.
AMD anticipates it will finance the cash portion of the
transaction with a combination of cash and new debt. AMD has obtained
a $2.5 billion term loan commitment from Morgan Stanley Senior
Funding, Inc. which, together with combined existing cash, cash
equivalents, and short term investments balances of approximately $3.0
billion, provides full funding for the transaction.
ATI has received an opinion from its financial advisors that the
transaction from a financial point of view is fair to its
shareholders. The transaction was unanimously approved by the board of
directors of each company. The transaction is subject to ATI
shareholder approval, Canadian court supervision of a Plan of
Arrangement, and other regulatory approvals including merger
notification filings in the United States, Canada and other
jurisdictions, as well as customary closing conditions. In the event
that the transaction does not close, ATI has agreed to pay AMD a
termination fee of $162.0 million under circumstances specified in the
acquisition agreement. The transaction is expected to be completed in
the fourth quarter of 2006.

A Compelling Financial Opportunity

AMD expects that the transaction will be slightly accretive to
earnings in 2007, and meaningfully accretive in 2008, before the
inclusion of ATI acquisition-related charges, based upon AMD's plans
to deliver more integrated and advanced platform solutions and thereby
improve its position in commercial clients, mobile computing, gaming,
media and emerging markets. AMD anticipates that it will reduce
operating expenses by approximately $75 million for the combined
company by the end of 2007.
The combined company would have achieved approximately $7.3
billion(1) in total consolidated sales during the last four quarters
with a workforce of approximately 15,000 employees. Headquartered in
Sunnyvale, California, the company will maintain sales, design and
manufacturing centers worldwide and major business centers in Silicon
Valley, Austin, Texas and Markham, Ontario - all valued centers of
innovation for the combined company. AMD's current executive team will
be complemented by the addition of ATI President and CEO Dave Orton.
Orton will serve as an executive vice president of the ATI business
division, reporting to the AMD Office of the CEO, comprised of
Chairman and CEO Hector Ruiz and President and Chief Operating Officer
Dirk Meyer. In addition, under the terms of the acquisition agreement,
two ATI directors will join AMD's board of directors upon closing of
the transaction.
The collective roster of AMD and ATI's strong customer
relationships represents a "who's who" of the computing and consumer
electronics industries. Drawing upon a shared culture of
customer-centric innovation and engineering excellence, the combined
company will be well positioned to meet customer demand for more
innovative solutions, system-level engineering and faster
time-to-market.

Conference Call

The companies will host a financial analyst and press conference
call today at 8 a.m. EDT (5 a.m. PDT). The call can be accessed at
612-326-1027 (U.S.). Audio of the conference call will be available
live and also http://www.amd.com/announcement.
For those unable to listen to the live call, a telephone replay
will be available beginning July 24, 2006 at approximately 11:00 a.m.
EDT through July 30, 2006. That call can be accessed by dialing
800-475-6701 (U.S.) or 320-365-3844 (international) with conference
call ID 837580.

About AMD

Advanced Micro Devices (NYSE: AMD) is a leading global provider of
innovative microprocessor solutions for computing, communications and
consumer electronics markets. Founded in 1969, AMD is dedicated to
delivering superior computing solutions based on customer needs that
empower users worldwide. For more information visit www.amd.com.

About ATI

ATI Technologies Inc. is a world leader in the design and
manufacture of innovative 3D graphics, PC platform technologies and
digital media silicon solutions. An industry pioneer since 1985, ATI
is the world's foremost graphics processor unit (GPU) provider and is
dedicated to deliver 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 device
markets. With fiscal 2005 revenues of US $2.2 billion, ATI has
approximately 4,000 employees in the Americas, Europe and Asia. ATI
common shares trade on NASDAQ (ATYT) and the Toronto Stock Exchange
(ATY).

Safe Harbor Statement

This release contains forward-looking statements, which are made
pursuant to the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995. Forward-looking statements are commonly
identified by words such as "would," "may," "will," "expects," and
other terms with similar meaning. Forward-looking statements are based
on current beliefs, assumptions and expectations and speak only as of
the date of this release and involve risks and uncertainties that
could cause actual results to differ materially from current
expectations. The material factors and assumptions that could cause
actual results to differ materially from current expectations include,
without limitation, the following: (1) the possibility that there are
unexpected delays in obtaining regulatory approvals, (2) failure to
obtain approval of ATI shareholders or the court of the Plan of
Arrangement, (3) actions that may be taken by the competitors,
customers and suppliers of AMD or ATI that may cause the transaction
to be delayed or not completed, (4) the possibility that the revenues,
cost savings, growth prospects and any or other synergies expected
from the proposed transaction may not be fully realized or may take
longer to realize than expected, (5) the possibility that the
transaction may not be accretive as expected, (6) that Intel
Corporation's pricing, marketing programs, product bundling, new
product introductions or other activities will negatively impact
sales, (7) that the company may require additional capital and may not
be able to raise sufficient capital, on favorable terms or at all, (8)
delays associated with integrating the companies, including employees
and operations, after the transaction is completed, (9) the possible
impairment of goodwill and other long-lived assets resulting from the
transaction and the resulting impact on the combined company's assets
and earnings, (10) unexpected variations in market growth and demand
for the combined company's products (in the mixes available) and
technologies, (11) rapid and frequent technology changes in the
computing and consumer electronics segments, (12) potential
constraints on the ability to develop, launch and ramp new products on
a timely basis, (13) R&D costs associated with the development of new
products, and (14) other factors that may affect future results of the
combined company described in the section entitled "Risk Factors" in
the management information circular to be mailed to ATI's shareholders
and in AMD and ATI's filings with the U.S. Securities and Exchange
Commission ("SEC") that are available on the SEC's web site located at
http://www.sec.gov, including the section entitled "Risk Factors" in
AMD' s Form 10-Q for the fiscal quarter ended March 26, 2006 and the
section entitled "Risks and Uncertainties" in Exhibit 1 to ATI's Form
40-F for the fiscal year ended August 31, 2005. Please see Item 3.12
"Narrative Description of the Business - Risks and Uncertainties" in
ATI's 2005 Annual Information Form and the Risks and Uncertainties
section of ATI's annual MD&A on page 30 of ATI's 2005 Annual report
filed on the SEDAR website maintained by the Canadian Securities
Administrators at http://www.sedar.com. Readers are strongly urged to
read the full cautionary statements contained in those materials. We
assume no obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or
any other reason.

Additional Information

In connection with the proposed transaction, ATI intends to file a
management proxy circular with the Canadian securities regulatory
authorities. Investors and security holders are urged to read the
management proxy circular when it becomes available because it will
contain important information about AMD, ATI and the transaction.
Investors and security holders may obtain the management proxy
circular free of charge on SEDAR website maintained by the Canadian
Securities Administrators at http://www.sedar.com as well as on the
SEC's website located at http://www.sec.gov. Investors and security
holders may obtain any documents relating to the transaction filed by
AMD with the SEC free of charge at the SEC's website located at
http://www.sec.gov and filed by ATI on SEDAR at www.sedar.com.

(C) 2006 Advanced Micro Devices, Inc. and ATI Technologies Inc.
All rights reserved. AMD, the AMD Arrow logo, and combinations
thereof, are trademarks of Advanced Micro Devices, Inc. ATI and ATI
product and product feature names are trademarks and/or registered
trademarks of ATI Technologies Inc. Microsoft and Windows are
registered trademarks of Microsoft Corporation in the United States
and/or other jurisdictions. Other names are for informational purposes
only and may be trademarks of their respective owners.

(1) Excluding AMD memory segment for the third and fourth quarters
of 2005.