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PROSPECTUS SUPPLEMENT                           FILED PURSUANT TO RULE 424(b)(3)
TO PROSPECTUS DATED JULY 25, 2001                     REGISTRATION NO. 333-63996

                                  $511,500,000

                                ATMEL CORPORATION
            ZERO COUPON CONVERTIBLE SUBORDINATED DEBENTURES DUE 2021
                                       AND
                             SHARES OF COMMON STOCK

        This prospectus supplement relates to the resale by the selling
securityholders of our Zero Coupon Convertible Subordinated Debentures due 2021
and the shares of our common stock, par value $0.001 per share, issuable upon
the conversion of the debentures.

        This prospectus supplement should be read in conjunction with the
prospectus dated July 25, 2001, which is to be delivered with this prospectus
supplement.

        The table below sets forth information as of the date hereof concerning
beneficial ownership of the debentures of the selling securityholders therein
listed. All information concerning beneficial ownership has been furnished by
the selling securityholders.



                                                PRINCIPAL
                                                AMOUNT AT                  NUMBER OF
                                                MATURITY OF                SHARES OF
                                                DEBENTURES    PERCENTAGE     COMMON      PERCENTAGE
                                               BENEFICIALLY       OF       STOCK THAT     OF COMMON
                                                OWNED THAT    DEBENTURES     MAY BE         STOCK
                NAME                            MAY BE SOLD   OUTSTANDING    SOLD(1)    OUTSTANDING(2)
                ----                           ------------   -----------  ----------   --------------
                                                                            
D.E. Shaw Investments, L.P. .................     1,000,000         *         22,983           *
D.E. Shaw Valence, L.P. .....................     4,000,000         *         91,932           *
Deutsche Banc Alex Brown Inc. ...............    16,300,000       3.19%      374,623           *
Goldman Sachs and Company (3)................       200,000         *         4,597            *
Southdown Pension Plan.......................       850,000         *         19,536           *

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 *      Less than 1%.

(1)     Assumes conversion of all of the holder's debentures at a conversion
        price of $17.02 per share of common stock. However, this conversion
        price will be subject to adjustment as described under "Description of
        Debentures -- Conversion of Debentures by Holders," beginning on page
        19. As a result, the amount of common stock issuable upon conversion of
        the debentures may increase or decrease in the future. Under the terms
        of the indenture, cash will be paid in lieu of issuing fractional
        shares, if any, upon conversion of the debentures.

(2)     Calculated based on Rule 13d-3(d)(1)(i) of the Exchange Act using
        463,708,515 shares of common stock outstanding as of March 31, 2001. In
        calculating this amount, we treated as outstanding the number of shares
        of common stock issuable upon conversion of all of that particular
        holder's debentures. However, we did not assume the conversion of any
        other holder's debentures.

(3)     Does not include 371,891 shares of common stock issuable upon conversion
        of $6,649,000 in principal amount at maturity of our Zero Coupon
        Convertible Subordinated Debentures due 2018 beneficially owned by
        Goldman Sachs and Company.

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        THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 5 OF THE PROSPECTUS.

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        NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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            The date of this Prospectus Supplement is August 1, 2001.