LFoundry acquires Atmel’s French wafer fab ops

SAN JOSE, USA: German analog and mixed-signal foundry LFoundry GmbH has completed its acquisition of Atmel Corporation’s wafer fabrication operation in Rousset, France. Plans for the acquisition were announced earlier, but has only now reached completion.

“The completion of this transaction marks a major step in converting Atmel's manufacturing operations to a fab-light business model,” said Steven Laub, Atmel's president and chief executive officer.

“Since implementing our transformation plan, we have reduced our wafer fabrication facilities from five to one and successfully divested or shut down 14 non-core product lines as we focus the company on its core microcontroller and touch products,” he added.

Over 750 former Atmel employees at the Rousset wafer fabrication operation are now part of the Lfoundry group. This move is expected to triple the unit’s production capacity to over 30,000 wafer starts per month.

LFoundry and Atmel have jointly entered into an approximately 4-year wafer supply agreement, which ensures that Atmel will be a long-term customer of LFoundry.

For the second quarter of 2010, Atmel expects to record a loss on the sale of the Rousset fabrication operation, which is not expected to exceed $110 million. The completion of the acquisition process is seen as a big step in making Atmel’s manufacturing operations to a fab-light business model, say sources at Atmel.

In the time that the plan has been in place, wafer fabrication facilities have been reduced from five to one, and 14 non-core product lines have been divested or shut down. The company is continuing to focus on its core microcontroller and touch products.

On another note, the company is continuing on track to sign and close the deal with Inside Contactless, who have given Atmel a binding offer to acquire its smartcard business.