Profile: Atmel Corporation (ATML.O)

Atmel Corporation (Atmel), incorporated in December 1984, designs, develops, manufactures and sells a range of integrated circuits (IC) products, including microcontrollers, advanced logic, mixed-signal, nonvolatile memory and radio frequency (RF) components. These complex system-on-a-chip solutions are manufactured using the Company’s process technologies, including complementary metal oxide semiconductor (CMOS), double-diffused metal oxide semiconductor (DMOS), logic, CMOS logic, bipolar, bipolar CMOS (BiCMOS), silicon germanium (SiGe), SiGe BiCMOS, analog, bipolar double diffused CMOS and radiation tolerant process technologies. The Company’s products are used in markets, which include industrial, consumer electronics, automotive, wireless communications, computing, storage, security, military and aerospace. The Company organizes its business into four operating segments: Microcontrollers, Nonvolatile Memories, RF and Application specific integrated circuit (ASIC). On March 6, 2008, the Company acquired Quantum Research Group Ltd.

Microcontrollers

Microcontroller segment includes a range of microcontrollers, the majority, of which contain embedded nonvolatile memory and integrated analog peripherals. This segment also includes products with military and aerospace applications. The Company’s Microcontrollers segment offers customers a range of products to serve the consumer, automotive, industrial, telecom and personal computer (PC) peripheral end markets for embedded controls. Its product portfolio has four microcontroller architectures targeted at the high volume embedded control market: 8-bit and 32-bit AVR platforms, its embedded ARM-based product family, and 8051 8-bit based industry microcontroller products.

Atmel’s microcontroller product offering is based on the 8-bit AVR architecture. The tinyAVR, megaAVR, Xmega AVR, AVR Wireless products, AVR USB products, AVR Smart Battery products and the AVR Touch User Interface products are all product families using the AVR 8-bit RISC CPU, which allow customers to minimize power consumption. AVR products accounted for 23% of total revenue for the year ended December 31, 2008. The AVR32 product offering is targeted at the industrial, automotive and ultra low power segments of the 32-bit market. AVR microcontroller products include embedded non-volatile memory and are available with a selection of analog and digital interfaces. The Company also supplies sensing solutions for touch screens and other touch controls.

The Company’s ARM-based microcontrollers are designed utilizing the 32-bit ARM7 and ARM9 architectures, where it offers a range of products with and without embedded nonvolatile memories. Its SAM7 and SAM9 (Smart Arm Micro) products offer 32-bit microcontrollers with a variety of analog and digital peripherals integrated on the same chip. Atmel’s 8051 8-bit microcontroller product offering is based on the 8051 CPU and ranges from products containing 2 kilobyte (Kbytes) of embedded Flash memory to the products offering 128 kilobyte of embedded Flash memory. Microcontroller segment accounted for 33% of net revenues during the year ended December 31, 2008.

Nonvolatile Memories

Nonvolatile Memories segment includes serial interface electrically erasable programmable read-only memory (SEEPROM) and serial interface Flash memory products. This segment also includes parallel interface Flash memories, as well as mature parallel interface electrically erasable programmable read-only memory (EEPROM) and erasable programmable read-only memory (EPROM) devices. The DataFlash family of Serial Flash memories delivers solutions to store varying amounts of granular data or to store both embedded program code and data while utilizing very small, low pin-count packages. DataFlash products are used in a variety of applications, such as digital answering machines, fax machines, PC, printers, radar detectors, security systems and energy meters. SPI Flash products utilize ultra-small packages, such as dual flat no-lead (DFN’s) and chip-scale packages (CSP’s).

Atmel is a supplier of in-system programmable Parallel EEPROM’s. The Company supplies customers for certain Parallel EEPROM devices. In the design of this product family, Atmel has emphasized device reliability, achieved through the incorporation of on-chip error detection and correction features. These products are generally used to store frequently updated data in communications infrastructure equipment and avionics navigation systems. The Company offers faster speed, higher density and lower power usage devices. These products are generally used to store the operating programs of embedded microcontroller or digital signal processor-based systems, such as hard disk drives, compact disc-read only memory (CD-ROM) drives and modems. This segment also includes products with military and aerospace applications. Nonvolatile Memories segment accounted for 22% of net revenues during the year ended December 31, 2008.

Radio Frequency and Automotive

RF and Automotive segment includes products designed for the automotive industry. This segment produces and sells wireless and wired devices for industrial, consumer and automotive applications and it also provides foundry services, which produce RF products for the mobile telecommunications market. The products in this segment include solutions for wireless key fobs, as well as the corresponding receivers and transceivers for the access control unit built into cars. In addition, Atmel offers a portfolio of products targeted at keyless automobile starting systems. Atmel’s high voltage products ICs are manufactured utilizing mixed signal high voltage technology, providing analog-bipolar, high voltage DMOS power and CMOS logic function on a single chip. These ICs withstand and operate at high voltages and can be connected directly to the battery of a car, with a focus on load drivers and local interconnect network (LIN) in-vehicle networking and battery management hybrid cars products.

The RF product line includes its low frequency RF identification tag ICs, which are targeted towards the access control market and the livestock and pet tagging markets. These ICs are used in combination with a reader IC to make possible contactless identification for a variety of applications. The Company’s radio frequency products also target the industrial, scientific, medical RF market, including wireless remote control applications, such as home alarm systems, garage door openers, remote controlled toys, wireless game consoles and many others. Atmel offers drivers for read only and read-write optical drives, including the high density Blu-Ray standards. The Company’s broadcast radio products cater primarily for the automotive market. In addition, the Company’s infrared (IR) receivers are markets for IR remote control systems. The RF and Automotive segment accounted for 16% of net revenues during the year ended December 31, 2008.

Application specific integrated circuit

ASIC segment includes customer and application specific integrated circuits designed to meet specialized single-customer requirements for their devices in a variety of specific applications. This segment also encompasses a range of products, which provide security for digital data transactions, including smart cards for mobile phones, set top boxes, banking and national identity cards. The Company also develops application specific standard products (ASSP) for space applications, power management and secure crypto memory products. The Company designs and manufactures ASICs in a range of products that includes standard digital and analog functions, as well as nonvolatile memory elements and pre-designed macro functions all integrated on a single chip. The Company’s ASIC products are targeted primarily at customers whose applications require high-speed, high-density or low and mixed-voltage devices, such as in the medical, consumer and security markets.

Atmel’s CAP customizable microcontroller combines, on a single IC, an ARM-based microcontroller system-on-chip with a high-density metal programmable block that enables customers to add application-specific logic. The Company’s Smart Card ICs primarily serve the cellular phone, banking, health card, national identification (ID) card and set-top box markets. Atmel also produces a portfolio of secure ICs, including CryptoMemory and CryptoRF, and smart card reader chips. AVR and ARM microcontroller offers solutions for applications, such as global system for mobile computing (GSM) subscriber identity module (SIM) cards and multi-application smart cards running on open platforms like Java.

Atmel has introduced solutions with multimedia and wireless communications devices targeting home entertainment, security, and automotive applications where information security is a primary objective. The Company’s FPGAs (field programmable gate arrays), with FreeRAM and Cache Logic, provide memory management and a reconfigurable solution for adaptive digital signal processing and other computationally intensive applications. It also offers a family of radiation hardened FPGAs for space applications. Atmel’s family of reconfigurable FPGA Serial Configuration EEPROMs can replace one-time-programmable devices for FPGAs from other vendors. In addition it offers FPGA-to-gate array conversions for both military and commercial applications. The ASIC segment accounted for 29% of net revenues during the year ended December 31, 2008.

The Company competes with AMD, Cypress, Freescale, Fujitsu, Hitachi, IBM, Infineon, Intel, LSI Logic, Microchip, Philips, Renesas, Samsung, Sharp, Spansion, STMicroelectronics, Synaptics, Texas Instruments and Toshiba.