Atmel completes sale of wafer manufacturing operation in Rousset, France to LFoundry

SAN JOSE, USA: Atmel Corp., a leader in microcontroller and touch solutions, 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 CEO. "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.