Atmel Completes Sale of Wafer Manufacturing Operation in Rousset, France to LFoundry GmbH

SAN JOSE, Calif., June 23 /PRNewswire-FirstCall/ -- Atmel® Corporation (Nasdaq: ATML), a leader in microcontroller and touch solutions, today announced that it has completed the previously announced sale of Atmel's wafer fabrication operation located in Rousset, France to LFoundry GmbH.  

"The completion of this transaction marks a major step in converting Atmel's manufacturing operations to a fab-light business model," said Steven Laub, Atmel's President and Chief Executive Officer.  "Since implementing our transformation plan, we have reduced our wafer fabrication facilities from five to one and successfully divested or shut down 14 non-core product lines as we focus the company on its core microcontroller and touch products."

This transaction was previously approved by employees of the Rousset fab and the Works Council of Atmel Rousset.   As of the closing, over 750 employees  employed at the Rousset fab, which manufactures Atmel's high-performance ASIC, memory and microcontroller devices, become part of LFoundry.  Atmel will purchase wafers under a supply agreement from LFoundry for up to four years.  During the second quarter of 2010, Atmel expects to record a loss on the sale of the Rousset fabrication operation that will not exceed $110 million.

Consistent with its strategy to focus on its high growth microcontroller and touch businesses, the company recently announced it has received a binding offer from INSIDE Contactless to acquire its Smartcard (SMS) Business, which remains on track to sign and close in the second half of 2010.

About Atmel

Atmel is a worldwide leader in the design and manufacture of microcontrollers, capacitive touch solutions, advanced logic, mixed-signal, nonvolatile memory and radio frequency (RF) components.  Leveraging one of the industry's broadest intellectual property (IP) technology portfolios, Atmel provides the electronics industry with complete system solutions focused on industrial, consumer, security, communications, computing and automotive markets.  For more information, please visit www.atmel.com.

Safe Harbor for Forward-Looking Statements

Information in this release regarding Atmel's forecasts, outlook, expectations and beliefs are forward-looking statements that involve risks and uncertainties. These statements include statements about Atmel's transformation plans and exploration of strategic alternatives for its ASIC business and related manufacturing assets, including the potential transaction with INSIDE Contactless, Atmel's recording a loss from the sale of the Rousset fab, and Atmel's strategies. All forward-looking statements included in this release are based upon information available to Atmel as of the date of this release, which may change, and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to such differences include general economic conditions; risk relating to the negotiation, signing and closing of a potential transaction with INSIDE Contactless, including the risk that INSIDE is unable to obtain financing commitments from its investors and that the parties may not sign definitive agreements relating to the transaction; that required approvals may not be obtained in a timely manner or at all, or that other conditions are not satisfied; the inability to realize the anticipated benefits of a potential transaction with LFoundry or INSIDE, if consummated, or of our other recent strategic transactions, restructuring plans and other initiatives in a timely manner or at all; unanticipated costs and expenses or the inability to identify expenses which can be eliminated; and other risks detailed from time to time in Atmel's SEC reports and filings, including our Form 10-K for the year ended December 31, 2009, filed on March 1, 2010, and our subsequent Form 10-Q reports.

SOURCE Atmel Corporation

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