Atmel Pursuing Strategic Alternatives for Its ASIC Business and Related Manufacturing Assets

SAN JOSE, Calif., Feb. 4 /PRNewswire/ -- SAN JOSE, Calif., Feb. 4 /PRNewswire-FirstCall/ -- Atmel(R) Corporation (NASDAQ: ATML) today announced that it is pursuing strategic alternatives for the Company's ASIC business and related manufacturing assets, including a potential sale. This is a further step in Atmel's transformation plan, which is aimed at focusing on the Company's core microcontroller business and enhancing its cost structure.

"Atmel's Board and management team are focused on fully realizing the value of our company," said Steven Laub, Atmel's President and Chief Executive Officer. "Over the last year, we have taken decisive actions to improve and restructure nearly every aspect of Atmel's operations. The exploration of strategic alternatives for our ASIC business is another step in Atmel's ongoing transformation plan. Our ASIC business is a market leader in multiple segments, but is not a core component of our long-term strategy to build a microcontroller based company. As we proceed with this process, we will remain focused on continuing to drive technological leadership in our core business and providing innovative products and services for our ASIC customers."

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 segments: Customer Specific Products (CSP), Smart Cards (SMS) and Aerospace. The ASIC business also includes an advanced 200mm fab located in Rousset, France, and a test and finishing operation located in East Kilbride, Scotland, UK, along with related design, operation, marketing, sales and support resources. Revenues for the ASIC business totaled $416 million for the twelve months ended December 31, 2008.

Morgan Stanley is serving as Atmel's financial advisor in connection with the evaluation of strategic alternatives for the ASIC business.

About Atmel

Atmel is a worldwide leader in the design and manufacture of microcontrollers, advanced logic, mixed-signal, non-volatile 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 consumer, industrial, security, communications, computing and automotive markets.

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 our pursuing strategic alternatives for the Company's ASIC business and related manufacturing assets, restructuring initiatives and our 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 the ability to realize the anticipated benefits of our strategic transactions, restructuring plans and other initiatives in a timely manner or at all, general economic conditions, the impact of competitive products and pricing, timely design acceptance by our customers, timely introduction of new products and technologies, ability to ramp new products into volume production, industry wide shifts in supply and demand for semiconductor products, industry and/or Company overcapacity, effective and cost efficient utilization of manufacturing capacity, financial stability in foreign markets and the impact of foreign exchange rates, unanticipated costs and expenses or the inability to identify expenses which can be eliminated, the market price of our common stock, unfavorable results of legal proceedings, impact of any future proposal by Microchip to acquire Atmel, and the Company's response thereto, 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, 2007, filed on February 29, 2008, and our subsequent Form 10-Q reports. The Company notes that there can be no assurance that the evaluation of strategic alternatives for the ASIC business announced today will result in any sale or other transaction.

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