OPERATING AND GEOGRAPHICAL SEGMENTS

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

OPERATING AND GEOGRAPHICAL SEGMENTS

OPERATING AND GEOGRAPHICAL SEGMENTS

The Company designs, develops, manufactures and sells semiconductor integrated circuit products. The Company’s segments represent management’s view of the Company’s businesses and how it allocates Company resources and measures performance of its major components. Each segment consists of product families with similar requirements for design, development and marketing. Each segment requires different design, development and marketing resources to produce and sell products. Atmel’s four operating and reportable segments are as follows:

• Microcontrollers. This segment includes Atmel's capacitive touch products, including maXTouch and QTouch, AVR 8-bit and 32-bit products, ARM based products, Atmel's 8051 8-bit products, and designated commercial wireless products, including low power radio and SOC products that meet Zigbee and Wi-Fi specifications. XSense related products are also included as part of this segment.

• Nonvolatile Memories. This segment includes serial interface electrically erasable programmable read-only memory (“SEEPROM”), electrically erasable programmable read-only ("EEPROM") and erasable programmable read-only memory (“EPROM”) devices. This segment also includes products with military and aerospace applications. In the third quarter of 2012, the Company sold its serial flash product line.

• Radio Frequency (“RF”) and Automotive. This segment includes automotive electronics, wireless and wired devices for industrial, consumer and automotive applications and foundry services.

• Application Specific Integrated Circuit (“ASIC”). This segment includes custom application specific integrated circuits designed to meet specialized single‑customer requirements for their high performance devices, including products that provide hardware security for embedded digital systems, products with military and aerospace applications and application specific standard products for space applications, power management and secure cryptographic memory products.

The Company evaluates segment performance based on revenue and income or loss from operations excluding acquisition-related charges, restructuring charges, asset impairment charges, impairment on receivables from foundry supplier, credit from reserved grant income and gain on sale of assets. Interest and other (expense) income, net, foreign exchange gains and losses and income taxes are not measured by operating segment. Because the Company’s segments reflect the manner in which management reviews its business, they necessarily involve subjective judgments that management believes are reasonable in light of the circumstances under which they are made. These judgments may change over time or may be modified to reflect new facts or circumstances. Segments may also be changed or modified to reflect products, technologies or applications that are newly created, or that change over time, or other business conditions that evolve, each of which may result in reassessing specific segments and the elements included within each of those segments.

Segments are defined by the products they design and sell. They do not make sales to each other. The Company’s net revenue and segment income (loss) from operations for each reportable segment for the years ended December 31, 2012, 2011 and 2010 are as follows:

Information about Reportable Segments

	Micro- Controllers		Nonvolatile Memories		RF and Automotive			ASIC		Total
	(In thousands)
Year ended December 31, 2012
Net revenue from external customers	$	892,839	$	170,736	$	174,237		$	194,298	$	1,432,110
Segment income (loss) from operations	22,994		21,057		(12,004		)	42,496		$	74,543
Year ended December 31, 2011
Net revenue from external customers	$	1,113,579	$	255,683	$	202,013		$	231,778	$	1,803,053
Segment income from operations	235,478		55,721		16,962			64,009		$	372,170
Year ended December 31, 2010
Net revenue from external customers	892,301		277,179		188,090			286,490		$	1,644,060
Segment income from operations	$	158,888	$	39,839	$	14,341		$	13,008	$	226,076

The Company's primary products are semiconductor integrated circuits, which it has concluded constitutes a group of similar products. Therefore, it is impracticable to differentiate the revenues from external customers for each product sold. The Company does not allocate assets by segment, as management does not use asset information to measure or evaluate a segment’s performance.

Reconciliation of Segment Information to Consolidated Statements of Operations

	Years Ended
	December 31, 2012			December 31, 2011			December 31, 2010
	(In thousands)
Total segment income from operations	$	74,543		$	372,170		$	226,076
Unallocated amounts:
Acquisition-related charges	(7,388		)	(5,408		)	(1,600		)
Restructuring charges	(23,986		)	(20,064		)	(5,253		)
Impairment of receivables due from foundry supplier	(6,495		)	—			—
Asset Impairment Charges	—			—			(11,922		)
Credit from reserved grant income	10,689			—			—
Gain (loss) on sale of assets	—			35,310			(99,767		)
Consolidated income from operations	$	47,363		$	382,008		$	107,534

Geographic sources of revenue were as follows:

	Years Ended
	December 31, 2012		December 31, 2011		December 31, 2010
	(In thousands)
United States	$	189,699	$	249,887	$	260,091
Germany	175,930		237,777		207,305
France	28,343		31,231		55,107
Japan	51,141		57,376		46,671
China, including Hong Kong	451,642		531,561		489,480
Singapore	41,637		42,982		42,819
South Korea	178,547		223,967		143,213
Taiwan	67,806		135,650		115,559
Rest of Asia-Pacific	72,128		71,048		70,958
Rest of Europe	149,104		193,558		177,274
Rest of the World	26,133		28,016		35,583
Total net revenue	$	1,432,110	$	1,803,053	$	1,644,060

Net revenue is attributed to regions based on ship-to locations.

The Company had two customers that accounted for 12% and 10%, respectively, of net revenue in the year ended December 31, 2012. No single customer accounted for more than 10% of net revenue in any of the years ended December 31, 2011 and 2010. Two distributors accounted for 14% and 12% of accounts receivable at December 31, 2012 and one customer accounted for 10% of accounts receivable at December 31, 2012. Two distributors accounted for 15% and 14%, respectively, of accounts receivable at December 31, 2011.

Physical locations of tangible long-lived assets as of December 31, 2012 and 2011 were as follows:

	December 31, 2012		December 31, 2011
	(In thousands)
United States	$	85,044	$	81,777
Philippines	61,594		71,332
Germany	17,602		20,681
France	28,000		30,277
Rest of Asia-Pacific	38,842		59,906
Rest of Europe	9,547		10,534
Total	$	240,629	$	274,507

Excluded from the table above are auction-rate securities of $1.1 million and $2.3 million at December 31, 2012 and 2011, respectively, which are included in other assets on the consolidated balance sheets. Also excluded from the table above as of December 31, 2012 and 2011 are goodwill of $104.4 million and $67.7 million, respectively, intangible assets, net of $27.3 million and $20.6 million, respectively, and deferred income tax assets of $102.3 million and $121.4 million, respectively.