Atmel Corporation announced that it has entered a Stipulation and Agreement of Compromise, Settlement and Release to settle previously disclosed litigation regarding Atmel's response to a subsequently-withdrawn acquisition proposal by Microchip Technology Inc. and ON Semiconductor Corp., including Atmel's adoption of an amendment to its Amended and Restated Preferred Shares Rights Agreement, dated as of October 18, 1999. The terms of the Stipulation are based on the terms of an agreement-in-principle set forth in a Memorandum of Understanding dated as of September 14, 2009. The Stipulation provides, on behalf of a non-opt out class consisting of all record holders and beneficial owners of Atmel common stock at any time during the period from October 2, 2008 through and including November 6, 2009, for the full settlement and release of all claims by or against Atmel and all of the defendants related to the allegations and/or matters set forth in three stockholder class actions consolidated under the caption In re Atmel Corporation Shareholders Litigation filed in the Court of Chancery of the State of Delaware, and a class and derivative action captioned Zucker v. Laub, et. al. filed in the Superior Court of the State of California. The suit pending before the Court alleged, among other things, that the definition of 'Beneficial Ownership' and 'Derivatives Contract' in the Rights Agreement were vague and unenforceable under Delaware law. The settlement set forth in the Stipulation is subject to and conditioned upon obtaining final approval by the Court.

Atmel Corporation announced its new VaultIC family of security modules for applications including femtocells, smart meters, telehealth, USB token and gaming platforms. The VaultIC460 is the first security module available on the market that provides a secure microcontroller with multiple interfaces and bundled firmware. Based on Atmel's AT90SO secureAVR microcontrollers, this new family enables higher levels of security and provides a secure turnkey solution for system designers. The VaultIC460 provides 128KB of fully configurable EEPROM memory to store user data and match any security architecture. The new VaultIC family offers designers enhanced functionality, a new interface with rapid computation of all standard cryptography algorithms, and higher security to protect both the keys and data. These products are designed to meet Common Criteria EAL4+ and FIPS 140-2 level 3 certifications to provide high security, performance and lower power consumption.

Atmel Corporation reported unaudited condensed consolidated earnings results for the third quarter and nine months ended September 30, 2009. Revenues for the third quarter of 2009 were $317.7 million, a 12% increase compared to $284.5 million for the second quarter of 2009, and a 21% decrease compared to $400.0 million for the third quarter ended September 30, 2008. Net loss, on a GAAP basis, for the third quarter of 2009 totaled $17.5 million or $0.04 per diluted share. This compares to a net loss of $12.4 million or $0.03 per diluted share for the second quarter of 2009 and a net loss of $4.7 million or $0.01 per diluted share for the year-ago quarter. Non-GAAP net loss for the third quarter of 2009 totaled $4.0 million or $0.01 per diluted share compared to non-GAAP net loss of $0.6 million or $0.00 per diluted share for the second quarter of 2009, and non-GAAP net income of $42.6 million or $0.09 per diluted share for the year-ago quarter. Loss from operations was $14.7 million for the third quarter of 2009. This compares to a loss from operations of $17.6 million for the second quarter of 2009 and $11.3 million for the third quarter of 2008. Cash provided from operations totaled $59.4 million for the third quarter of 2009, compared to $1.6 million for the second quarter of 2009 and $67.2 million for the third quarter of 2008. For the quarter, the company reported loss from operations of $14,743,000 and loss before income taxes of $17,055,000 against loss from operations of $11,320,000 and loss before income taxes of $8,790,000 for the same period a year ago. For the nine months, the company reported loss from operations of $52,870,000, loss before income taxes of $63,266,000 and net loss of $26,231,000 or $0.06 per diluted share on net revenues of $873,765,000 against income from operations of $4,301,000, income before income taxes of $585,000 and net loss of $2,857,000 or $0.01 per diluted share on net revenues of $1,232,153,000 for the same period a year ago. Non-GAAP net loss for the period was $15,501,000 or $0.03 per diluted share against $73,222,000 or $0.16 per diluted share for the same period a year ago. For the fourth quarter of 2009, the company expects revenue will increase 3% to 7% on a sequential basis.