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Date: 07-10-10

Atmel sold its Smart Card business in Rousset, France and East Kilbride, UK to INSIDE

Atmel has completed the sale of Atmel's Smart Card (SMS) business based in Rousset, France and East Kilbride, UK to INSIDE Contactless S.A. At closing, INSIDE paid approximately $32 million in cash to Atmel after an adjustment based on the working capital of the transferred business. Atmel may receive additional cash consideration of up to $21 million if the SMS business under INSIDE's control meets certain financial targets in 2010 and 2011. As part of the transaction, Atmel has made a minority investment in INSIDE of approximately $4 million and entered into a royalty-based intellectual property license agreement to support current and future SMS products.

It has been reported that approximately 160 employees were transferred to INSIDE. The SMS business had revenues of approximately $27 million for Atmel during the second quarter of 2010. This transaction follows Atmel's sale of its wafer fabrication operation in Rousset, France, to LFoundry GmbH, which closed during the second quarter of 2010.

"This transaction, along with the sale of the Rousset wafer fabrication operation, fulfill the objectives that we outlined when we announced our plan to pursue strategic alternatives for Atmel's ASIC business and related manufacturing assets," said Steven Laub, Atmel's President and Chief Executive Officer. "Our strategic focus continues to be on advancing our core microcontroller and touch businesses which are currently experiencing rapid revenue increases and provide substantial future growth opportunities."

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