Under the plan, 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.

The new and more formidable company will combine technologies, people and complementary strengths of the two to drive growth through innovation and new product offerings in the commercial and mobile computing as also the consumer electronics segments.

AMD-ATI merger would also help deliver innovations and integrated solutions faster in key market segments while allowing greater choice for the consumers.

AMD is planning to switch over to new technology configurations using silicon-specific platforms that integrate microprocessors and graphics processors for general-purpose, media-centric, data-centric and graphic-centric performance.

"ATI shares our passion and complements our strengths: technology leadership and customer centric innovation," said Dr Hector Ruiz, CEO and chairman, AMD. "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," he added.

"This combination means accelerated growth for ATI, and broader horizons for our employees," said Dave Orton, president and CEO of ATI, adding, "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."

Advanced Micro Devices is a leading global company providing 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.

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 of 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 and the Toronto Stock Exchange.