LOSS FROM EUROPEAN FOUNDRY ARRANGEMENTS

12 Months Ended

Dec. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

LOSS FROM EUROPEAN FOUNDRY ARRANGEMENTS

LOSS FROM EUROPEAN FOUNDRY ARRANGEMENTS

In December 2008 and June 2010, Atmel entered into a take-or-pay agreement to purchase wafers from two European foundries that had acquired its European manufacturing operations in France and Germany, respectively. In connection with the anticipated expiration of these agreements, the Company notified customers of its end-of-life process and requested that customers provide to the Company last-time-buy orders. To the extent that the Company believes it has excess wafers that remain after satisfying anticipated customer demand, the Company estimates a probable loss for those excess wafers and records a charge to cost of revenue in the consolidated statements of operations. During 2013, the Company recognized a charge to cost of revenue of $7.4 million, which comprised a write-off of excess wafers in the amount of $10.4 million and a write-off of wafer prepayment in the amount of $1.9 million, which were partially offset by a reduction of a previously recorded liability from a take-or-pay arrangement for $4.9 million. These transactions resulted from the insolvencies of two of the Company's foundry suppliers.