ATI Technologies’ fiscal first-quarter 2000 sales rose 26% to $413.5 million, but reported net income increased only about 7%, to $53.6 million. The contrast was not a drop in profit: it was a fall in gross margin as a less favorable product mix, higher material costs and product-ramp expenses limited the payoff from strong demand.
Which ATI and which quarter?
The company was ATI Technologies Inc., the Canadian graphics and multimedia semiconductor maker—not Allegheny Technologies, the specialty-metals company. ATI Technologies was later acquired by AMD, which retired the ATI brand in 2010; ATI Technologies’ history summarizes that corporate timeline.
“Q1 2000” means ATI’s fiscal first quarter ended November 30, 1999, not the first three months of calendar 2000. The contemporaneous EE Times report, published January 13, 2000, gives the results in U.S. dollars.
What the results show
| Measure | Q1 fiscal 2000 | Year-earlier quarter | Change |
|---|---|---|---|
| Revenue | $413.5 million | $327.4 million | +26% |
| Reported net income | $53.6 million | $50.1 million | Approximately +7% |
| Diluted earnings per share | $0.25 | $0.23 | +$0.02 |
| Gross margin | 34.1% | 36.6% | −2.5 percentage points |
The same report said revenue was up 15% sequentially from the preceding quarter. Year over year, sales added $86.1 million, while reported net income added $3.5 million. The basic arithmetic explains the headline: ATI sold much more, but the additional revenue did not translate into earnings at the same rate.
Do these 3 things before closing this tab:
1Fix the driver behind crashes, sound loss and screen glitches2Clear out junk files and repair common Windows errors3Scan for outdated or missing drivers - takes under a minute#1 Best Overall
- System Compatibility Note: This 2‑slot card measures 249 mm (L) x 132 mm (W) x 41 mm (H) and requires a single 8‑pin power connector. Please verify available chassis clearance and ensure your power supply is rated for a recommended 550W before purchase.
- Dedicated Support: Please contact us directly through Amazon for any product questions or assistance you may require.
- Next‑Gen AMD RDNA 4 Architecture: Powered by the AMD Radeon RX 9060 XT GPU with 32 Compute Units featuring 3rd Gen Ray Tracing and 2nd Gen AI Accelerators, delivering exceptional 1440p gaming and AI‑enhanced performance.
- Blazing‑Fast Engine Clock: Delivers a boost clock of up to 3290 MHz and a game clock of 2700 MHz out of the box, providing the raw power for smooth, high‑framerate gameplay.
- 16GB GDDR6 Memory on 128‑Bit Bus: Equipped with 16GB of high‑speed GDDR6 memory running at 20 Gbps, offering ample capacity and bandwidth for modern game textures and creative applications.
Why sales rose
ATI benefited from strong seasonal PC demand and robust interest in its Rage 128 and Rage Mobility graphics accelerators. The quarter came during the late-1990s expansion of PC graphics, with Rage Mobility serving the growing notebook market alongside desktop products.
ATI also said it managed the effects of the Taiwan earthquake quickly. That is evidence of a response to a supply-chain disruption, not evidence that the earthquake itself created demand or that the company suffered a quantified production loss. The contemporaneous report does not provide a product-by-product revenue breakdown.
Why higher sales brought lower margins
Product mix and product ramps
Product mix is the balance of sales among products that can have different costs and margins. If a larger share of revenue comes from products that are more complex or costly to produce, overall gross margin can decline even when demand and total sales are rising. EE Times linked ATI’s mix shift and additional costs to meeting demand for Rage 128 and Rage Mobility products. It did not quantify each family’s share of revenue or establish that either product had a particular profitability ranking.
Rank #2
- System Compatibility Note: 2.9-slot design with dimensions 298 x 131 x 58 mm; requires two 8-pin PCIe power connectors and a recommended 800W power supply. Please verify available space and PSU compatibility before purchase.
- Dedicated Support: Please contact us directly through Amazon for any product questions or assistance you may require.
- Flagship RDNA 4 Performance: Powered by the AMD Radeon RX 9070 XT GPU with 64 Compute Units featuring 3rd Gen Ray Tracing and 2nd Gen AI Accelerators, delivering uncompromising 4K gaming and AI-enhanced workloads.
- Generous 16GB GDDR6 VRAM: 16GB of high-speed GDDR6 memory on a 256-bit memory bus running at 20 Gbps, providing exceptional bandwidth for 4K textures, ray tracing, and professional content creation.
- Factory Overclocked: Boost clock up to 2970 MHz and Game Clock at 2400 MHz, delivering peak performance out of the box for the most demanding games and applications.
Material costs
ATI also cited increased material costs. Those costs affect the economics of manufacturing and, together with the mix shift and ramp-related expenses, help explain why gross margin declined from 36.6% to 34.1%.
Amortization of acquired intangibles
The report also referred to amortization of intangibles. This is an accounting expense associated with acquired assets such as intellectual property. It reduces reported earnings, but it is not the same kind of cash production cost as materials or expenses incurred while ramping products. The report does not break out the precise contribution of each factor to the margin change.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Reported earnings versus an adjusted figure
The headline report’s figure is reported net income: $53.6 million, or $0.25 per diluted share. Later coverage by GameSpot cited adjusted net income of about $54.5 million, compared with about $52 million a year earlier, while separately reporting the $53.6 million and $50.1 million net-income figures. The adjusted number excludes specified acquisition-related or intangible-amortization effects; it is a different measure, not a replacement for reported income.
Rank #3
- Next-Gen Intel Arc Graphics: Powered by Intel Arc A580 GPU with Intel Xe HPG microarchitecture, featuring 384 XMX engines for enhanced AI acceleration and content creation.
- High-Performance Memory: 8GB GDDR6 on a 256-bit interface running at 16 Gbps, delivering excellent bandwidth for 1440p gaming and creative workloads.
- Factory Overclocked: Engine clock set at 2000 MHz out of the box, providing optimized performance for smooth gameplay and multimedia tasks.
- Advanced Dual-Fan Cooling: Features a dual-fan design with striped axial fans and an ultra-fit heatpipe for efficient thermal management. 0dB Silent Cooling stops fans completely at low temperatures for silent operation.
- Durable Construction: Includes a stylish metal backplate for enhanced PCB rigidity and a premium aesthetic, backed by ASRock's Super Alloy components for long-term reliability.
Using reported figures, net margin—net income divided by revenue—was about 13.0%, compared with about 15.3% a year earlier. These are calculated ratios, not figures quoted in the contemporaneous report. They reinforce the same distinction as gross margin: ATI remained profitable and increased profit dollars, but kept a smaller share of each sales dollar as net income.
What management expected next
ATI president and CEO K. Y. Ho described the quarter as a strong start to the year and pointed to opportunities beyond traditional PC graphics, including consumer-electronics applications. Those comments were management’s outlook, not evidence that consumer electronics had already become a significant source of revenue. The contemporaneous report gave no quantified target, forecast or backlog for that opportunity.
How to read the quarter
This was a strong growth quarter, not a quarter in which profit fell. Record sales and higher reported earnings indicated substantial demand, while the lower gross margin showed that the growth came with weaker incremental economics. In semiconductor businesses, a successful launch can increase revenue before production efficiency and product economics fully catch up; ATI’s cited product-ramp and material costs make that a reasonable interpretation here, rather than proof of a longer-term decline.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
