Atmel Corporation
(
ATML
) recently completed the sale of its Serial Flash memory product
lines to privately-held Adesto Technologies Corporation. However,
the financial terms of the transaction were not
disclosed.
The product lines include the Atmel AT45XXX (Data Flash) and
AT25XXX (BIOS Flash) product families and employee teams supporting
those products. The company has retained its Serial EEPROM, Crypto
and Digital Temperature Sensor memory product lines and expects to
continue to invest in those businesses. In addition, Atmel will
also assist Adesto for a smoother transition.
Meanwhile, Atmel is in the process of evolving into a purely
microcontroller-based company to improve its cost structure and
unlock value. The company is focusing on its core Microcontroller
business and is stalling development in non-core areas with the aim
of targeting high-growth and high-margin businesses.
The growing microcontrollers business is expected to contribute
to the company's top-line growth going forward. Microcontrollers
are poised to grow significantly based on versatile application in
various end markets, such as communications, industrial,
automotive, computer and consumer.
Atmel is well positioned in the microcontroller market as the
company is placed among the top players in this segment. The
migration of industrial and commercial lighting from lightbulbs to
LED requires a microcontroller that drives powers and supports the
LED lighting infrastructure.
Touch-sensing technology is the fastest growing area in Atmel's
microcontroller business and is expected to remain a major growth
driver in the coming quarters. The phenomenal growth is driven by
rapid growth of smartphones, the rise of Android tablets and the
penetration into new high-volume applications.
Atmel continues to see the touch-sensing market expand rapidly
beyond smartphones into new applications, such as tablets,
netbooks, cameras, printers, automotive and other areas. For
tablets, Atmel has won designs for Android tablet platforms from
Texas Instruments
(
TXN
) and
Qualcomm Inc
(
QCOM
).
We continue to maintain a Neutral recommendation on Atmel
Corporation. Our recommendation is supported by a Zacks #3 Rank,
which translates into a short-term rating of Hold.
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