OPERATING AND GEOGRAPHICAL SEGMENTS

12 Months Ended

Dec. 31, 2013

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 AVR 8-bit and 32-bit products, ARM based products, capacitive touch products, including maXTouch and QTouch, 8051 based products, XSense products and designated wireless products, including low power radio and SOC products that meet Zigbee and Wi-Fi specifications.

• Nonvolatile Memories. This segment includes electrically erasable programmable read-only ("EEPROM") and erasable programmable read-only memory (“EPROM”) devices. In the third quarter of 2012, the Company sold its Serial Flash product line.

• Radio Frequency (“RF”) and Automotive. This segment includes mixed signal, high voltage and connectivity products for automotive applications, RF identification products and foundry services.

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

The Company evaluates segment performance based on revenue and income or loss from operations excluding non-recurring items. 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 sell to each other. The Company’s net revenue and segment (loss) income from operations for each reportable segment is as follows:

Information about Reportable Segments

	Micro- Controllers			Nonvolatile Memories		RF and Automotive			ASIC		Total
	(in thousands)
Year ended December 31, 2013
Net revenue from external customers	$	896,916		$	114,264	$	182,857		$	192,410	$	1,386,447
Segment income (loss) from operations	(23,427		)	16,005		21,837			55,243		69,658
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

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, 2013			December 31, 2012			December 31, 2011
	(in thousands)
Total segment income from operations	$	69,658		$	74,543		$	372,170
Unallocated amounts:
Acquisition-related charges	(5,534		)	(7,388		)	(5,408		)
Restructuring charges	(50,026		)	(23,986		)	(20,064		)
Recovery (impairment) of receivables due from foundry supplier	600			(6,495		)	—
Settlement charges	(21,600		)	—			—
Credit from reserved grant income	—			10,689			—
Gain on sale of assets	4,430			—			35,310
Consolidated income (loss) from operations	$	(2,472	)	$	47,363		$	382,008

Geographic sources of revenue were as follows:

	Years Ended
	December 31, 2013		December 31, 2012		December 31, 2011
	(in thousands)
United States	$	192,878	$	189,699	$	249,887
Germany	199,298		175,930		237,777
France	26,270		28,343		31,231
Japan	41,533		51,141		57,376
China, including Hong Kong	417,617		451,642		531,561
Singapore	44,957		41,637		42,982
South Korea	142,476		178,547		223,967
Taiwan	51,830		67,806		135,650
Rest of Asia-Pacific	120,290		72,128		71,048
Rest of Europe	128,841		149,104		193,558
Rest of the World	20,457		26,133		28,016
Total net revenue	$	1,386,447	$	1,432,110	$	1,803,053

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

The Company had one distributor and one customer that accounted for 14% and 12%, respectively, of net revenue in the year ended December 31, 2013. The Company had one distributor and one customer that accounted for 12% and 10%, respectively, of net revenue in the year ended December 31, 2012. No single customer accounted for 10% or more of net revenue in the year ended December 31, 2011. One distributor accounted for 20% of accounts receivable at December 31, 2013 and no customer accounted for 10% or more of accounts receivable at December 31, 2013. Two distributors accounted for 14% and 12%, respectively, of accounts receivable at December 31, 2012 and one customer accounted for 10% of accounts receivable at December 31, 2012.

Physical locations of tangible long-lived assets were as follows:

	December 31, 2013		December 31, 2012
	(in thousands)
United States	$	104,912	$	85,044
Philippines	50,472		61,594
Germany	24,244		17,602
France	17,249		28,000
Rest of Asia-Pacific	23,815		38,842
Rest of Europe	7,026		9,547
Total	$	227,718	$	240,629

Excluded from the table above are auction-rate securities of $1.1 million at December 31, 2013 and 2012, which are included in other assets on the consolidated balance sheets. Also excluded from the table above as of December 31, 2013 and 2012 are goodwill of $108.2 million and $104.4 million, respectively, intangible assets, net of $28.1 million and $27.3 million, respectively, and deferred income tax assets of $134.4 million and $102.3 million, respectively.