Atmel Corporation (ATML): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


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Atmel reported decent fourth-quarter 2014 results with year-over-year growth in non-GAAP earnings. Adjusted earnings of $0.08 were in line with the Zacks Consensus Estimate, and were driven by successful cost-control initiatives. Fast-growing touch-sensing technology has been one of the major growth drivers for Atmel's microcontroller business. We expect Atmel's sustained gross margin expansion and new product launches to fuel growth, going forward. However, slowing semiconductor industry trends and softening end-market demand are expected to hurt Atmel's top line in the coming quarters. Also, intense competitive pressures and foreign exchange rate risk may prove to be additional headwinds. Thus, we maintain our long-term Neutral recommendation on the stock.


Based in San Jose, California, Atmel Corporation designs, develops, manufactures and sells integrated circuit (IC) products. These products include microcontrollers, advanced logic, mixed-signal, non-volatile memory and radio frequency (RF) components. Atmel produces non-volatile memory that stores information after power is turned off. Atmel combines non-volatile memory with microcontrollers, digital signal processors and other logic to meet the needs of its customers. These complex system-on-a-chip solutions for various markets are manufactured using its multiple process technologies, including complementary metal oxide semiconductor (CMOS), double-diffused metal oxide semiconductor, logic, CMOS logic, bipolar, bipolar CMOS (BiCMOS), silicon germanium (SiGe), SiGe BiCMOS, analog and bipolar double-diffused CMOS.

Atmel develops process technologies and manufactures products that are primarily used in markets such as industrial, wireless communications, consumer electronics, computing and storage, security, military and aerospace. The company's major customers include Bosch, Cisco, Daimler-Chrysler, Hewlett-Packard, Honeywell, IBM, Intel, Roche, Samsung, Seagate, Siemens-VDO, Sony and TRW. The company operates in four segments:

Microcontrollers segment includes a variety of proprietary and standard microcontrollers. This segment also includes products with military and aerospace applications. In March 2008, Atmel acquired Quantum Research Group Ltd., a supplier of capacitive sensing IP solutions and included it in this segment.

Non-volatile Memories segment primarily consists of interface electrically erasable programmable read-only memory (SEEPROM) and serial interface Flash memory products. This segment also includes parallel interface Flash memories as well as mature parallel interface electrically erasable programmable read-only memory (EEPROM) and erasable programmable read-only memory (EPROM) devices. This segment also includes products with military and aerospace applications.

Application-Specific Integrated Circuit (ASIC) segment includes customer and application specific integrated circuits. These products are designed to meet specialized single-customer requirements for their high performance devices in a broad variety of specific applications.

Radio Frequency (RF) and Automotive segment includes products designed for the automotive industry. This segment produces and sells wireless and wired devices for industrial, consumer and automotive applications and it also provides foundry services, which produce radio frequency products for the mobile telecommunications market.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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