Atmel updates progress on pursuing strategic alternatives for ASIC business

SAN JOSE, USA: Atmel Corp., a leader in MCU and touch solutions, announced that following a comprehensive review of alternatives for its ASIC business, it will continue to explore the potential sale of the company's Smart Card (SMS) business located in Rousset, France and East Kilbride, UK and that it intends to discontinue potential sale discussions for its Customer Specific Products (CSP) and Aerospace businesses.

Atmel's ASIC business is a leading provider of high performance customer specific integrated circuits and security solutions to the industrial, aerospace and consumer markets operating in three distinct business segments: Smart Cards (SMS), Customer Specific Products (CSP) and Aerospace. In addition, the ASIC business includes an advanced semiconductor wafer fabrication business located in Rousset, France.

As previously announced, Atmel has entered into an exclusivity agreement with LFoundry GmbH for the potential sale of this fab business. Atmel has been pursuing strategic alternatives for the ASIC business and related manufacturing assets as part of its transformation plan, which is aimed at focusing on the Company's high-growth and high-margin businesses.

"We are pleased with the progress we are making with the strategic alternatives process for the ASIC business and related manufacturing assets," said Steven Laub, Atmel's President and Chief Executive Officer. "The proposed sale of the wafer fabrication business in Rousset remains on track, and we continue to discuss the potential sale of the SMS business segment with interested parties. As part of our review, we have also determined that shareholders' interests are best served by Atmel retaining the CSP and Aerospace business segments."

Atmel confirmed that it continues to expect the Works Council in Rousset to render its opinion on the proposed LFoundry transaction in the first quarter of 2010. If Atmel receives the approval of the Works Council, Atmel will seek authorization from its Board of Directors to enter into a definitive agreement with LFoundry.

Atmel has informed the employee representatives of the Works Council in Rousset that it proposes to sell the SMS business in addition to the wafer fabrication business as part of the Company's pursuit of strategic alternatives for its ASIC business and related manufacturing assets, subject to, among other things, continued discussion with interested parties and consultation with the Rousset Works Council.