The folks at Atmel wave 'good-bye' to their foundry

Written by Clive Maxfield December 17, 2009 Hits: 378 Favorites

5.0 (1)

The folks at Atmel are well known for the design and manufacture of microcontrollers, advanced logic, mixed-signal, nonvolatile memory, and radio frequency (RF) components.

Leveraging one of the industry's broadest intellectual property (IP) technology portfolios, the guys and gals at Atmel provide the electronics industry with complete system solutions focused on consumer, industrial, security, communications, computing and automotive markets.

Silicon Chip

Anyway, I just heard that LFoundry GmbH has entered into an exclusivity agreement with Atmel Rousset for the purchase of Atmel's wafer fabrication operation in Rousset, France. Headquartered near Munich in Erding, Germany, LFoundry is an analog / mixed signal silicon foundry with a 200 mm production line providing access to manufacturing services down to advanced analog 0.15 micron CMOS technologies.

In accordance with French law, Atmel has presented the proposed acquisition to the employee representatives of the Works Council in Rousset. The Works Council is expected to render its opinion on the proposed transaction in the first quarter of 2010. If Atmel receives the approval of the Works Council, Atmel will seek authorization from its Board of Directors to enter into a definitive agreement with LFoundry GmbH. Proposed terms of the transaction were not disclosed.

Is this a good thing or a bad thing? Who knows? I guess that my knee-jerk reaction is that you don’t sell something like this unless you are short of cash or your foundry isn’t making any money. Maybe this will work out to be the best solution for everyone (especially the workers) ... I certainly hope so.

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Dumping Fabs

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Reviewed by Henry Davis
December 17, 2009

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There are a few other reasons that could motivate Atmel to sell:

1. they can't afford to invest to the next technology node
2. their money may be better spent developing new products, ie the marginal return on design is better for their case than the marginal return on the fab
3. their defense on the patent front for manufacturing may be waning, thus a sale to another company with a superior position could avoid expensive cross-licenses or lacking enough patents of their own, eliminate the need for very expensive one-sided licenses.

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Clive Maxfield