SGI Files Patent Infringement Lawsuit Against ATI

MOUNTAIN VIEW, Calif. (October 23, 2006) — SGI (NASDAQ: SGIC) announced today that it has filed a patent infringement lawsuit against ATI Technologies Inc. in U.S. District Court – Western District of Wisconsin.

In its Complaint filed today, SGI asserts that products in ATI's line of Radeon® graphics processors infringe U.S. Patent No. 6,650,327. The Complaint seeks unspecified damages and a Court Ordered injunction against future infringement by ATI.

"The Company's technology covered by the '327 patent is an important resource in achieving enhanced graphics processing demanded by today's computer systems," said Dennis McKenna, CEO of SGI. "SGI has licensed this technology to ATI's major competitors and, as I have previously been stating publicly, SGI intends to aggressively protect and enforce its IP. This is the first visible step in that process."

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This news release contains forward-looking statements relating to future events. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Risks are detailed from time to time in SGI's periodic reports that are filed with the Securities and Exchange Commission, including SGI's annual report on Form 10-K for the year ended June 30, 2006. SGI is under no obligation to publicly update or revise any forward-looking statements, whether changes occur as a result of new information, future events or otherwise.

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