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Who wants to buy Atmel?

Posted: 10 Jun 2015 ?? ?Print Version ?Bookmark and Share

Keywords:M&A? MCU? chip vendor?

Atmel Corp. wants to join the bandwagon of M&As currently trending in the global semiconductor market. According to a Reuters report, the chipmaker is exploring a possible sale to any potential buyer.

Atmel, a mid-sized chip vendor with revenue last year of $1.41 billion, is known for its MCU and touch-sensing technology. Atmel's latest pitch to the investment community is that its strategybanking on the emerging Internet of Things markethas transformed it into a higher-margin, higher-growth business.

During the company's earnings call last month, Steven Laub, president and CEO, announced his plan to retire at the end of August. He told financial analysts, "Today, the company is comprised of very desirable businesses: microcontrollers, wireless, touch, security and automotive, all of which are positioned to grow in attractive high growth markets."

Steven Laub

Steven Laub, Atmel CEO

Citing two unnamed sources, Reuters reported that Atmel has retained investment bank Qatalyst Partners to help with the sale process.

Atmel CEO's retirement

Some speculate that the retirement of Atmel's longtime CEO might be a factor driving the company's decision to explore alternatives.

During the last earnings call, Laub was asked to comment on NXP's planned acquisition of Freescale, a deal expected to make the combined entities the world's second largest general-purpose microcontroller vendor, after Renesas.

Laub said, "With respect to industry consolidation, there is no doubt that there has been a lot of that occurring over the past at least last couple of years, and I think the sense is there will be some continuation of that this year as well." However, he quickly added, "That hasn't had any influence on my decision to retire."

Adding more wireless connectivity

Beyond MCUs and touch solutions, Atmel has been busy beefing up its wireless connectivity portfolio. Last July, Atmel bought Newport Media, a provider of advanced Wi-Fi and Bluetooth solutions.

Among Atmel's wireless products are Wi-Fi-Direct (which came from Atmel's acquisition of Ozmo Devices in 2012), Wi-Fi b/g/n standard products, Bluetooth and newly introduced Bluetooth Low Energy products. The company claims that these new products are ramping today, but the CEO said that they're "not at a material level that we believe it is worthy to disclose those out."

How much of Atmel's revenue is really driven by IoT is hard to pin down. As Laub acknowledged, it "depends on how people want to define IoT." Noting that one company in the semiconductor industry defines IoT revenue as MCU, wireless, sensors and analogue, Laub said, "if using that definition and including security, our IoT revenue in the first quarter already exceeded $200 million."

As Atmel admits, this is an inflated number. Laub said, "We believe a more accurate definition is to only measure product revenue sold directly into IoT applications, which, when you have thousands of customers as we do, is difficult to precisely determine."

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