Press Releases

Atmel Announces Sale of Manufacturing Facility in North Tyneside, UK

Former Atmel North Tyneside fab III

San Jose, Calif., October 8, 2007 – Atmel(R) Corporation (Nasdaq: ATML) today announced that it has entered into separate agreements with TSMC (Taiwan Semiconductor Manufacturing Company, Ltd.) and Highbridge Business Park Limited for the sale of its eight-inch wafer fabrication equipment and related property located in North Tyneside, United Kingdom (UK). The sale is subject to customary closing conditions, including a comprehensive consultation exercise with employees in accordance with best UK employment relations practice. Atmel had previously announced its intention to sell this facility as part of its strategic restructuring initiatives to reduce costs, accelerate growth, and enhance profitability.

“The sale of our North Tyneside facility is a major step forward in transitioning Atmel to a fab-lite manufacturing model that will improve our cost structure and increase shareholder value,” said Steven Laub, Atmel’s president and CEO. “We are making measurable progress in enhancing Atmel’s competitive position as we implement our strategic restructuring initiatives and optimize our manufacturing capacity to improve Atmel’s financial strength. Atmel has many hard-working, dedicated employees who serve our customers and our company admirably. We are committed to treating employees with respect and helping ease the transition for employees at the North Tyneside facility as production is concluded.”

To ensure a seamless transition for its customers, Atmel will continue to manufacture products at the North Tyneside facility into the first quarter of 2008, during which time production will be redeployed to the company’s manufacturing operations in Colorado Springs, Colorado and Rousset, France as well as to external foundries.

Under the terms of the agreements, TSMC has agreed to purchase Atmel’s eight-inch wafer fabrication equipment and Highbridge Business Park Limited has agreed to purchase the North Tyneside land and buildings for a combined total of U.S.$124 million in cash. The company expects to record a gain of up to U.S.$40 million offset by related restructuring charges of up to U.S.$50 million. The timing for recording the gains and restructuring charges will be determined once all selling contingencies and closing conditions are finalized. The transaction is expected to be approximately neutral on a cash flow basis after the elimination of U.S.$35 million of debt and the recognition of other financial charges.

This sale follows the previously announced sale of Atmel’s Irving, Texas wafer fabrication facility for approximately U.S.$38 million in cash. With these transactions and the progress on the company’s other restructuring initiatives, Atmel continues to increase its focus on and investment in its high-growth, high-margin proprietary product lines.

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