8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 7, 2006

ATMEL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	0-19032	77-0051991
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2325 Orchard Parkway
San Jose, CA 95131
(Address of principal executive offices, including zip code)

(408) 441-0311
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.05 Costs Associated with Exit or Disposal Activities
	Item 2.06 Material Impairments
	Item 8.01 Other Events
	Item 9.01 Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EXHIBIT 99.1
EXHIBIT 99.2

Item 2.05 Costs Associated with Exit or Disposal Activities

On December 7, 2006, the board of directors of Atmel Corporation (the “Company”) approved, and on December 12, 2006 the Company announced, several strategic restructuring initiatives in order to enhance profitability, accelerate the Company’s growth and reduce costs. The Company plans to optimize its manufacturing operations by selling its North Tyneside, United Kingdom and Heilbronn, Germany wafer fabrication facilities and adopt a “fab-lite” manufacturing model by expanding the Company’s foundry relationships and better utilizing the Company’s remaining wafer fabrication facilities. In addition, the Company plans to implement a workforce reduction plan through a combination of voluntary resignations, attrition and other actions.

The workforce reduction plan is expected to result in a reduction of approximately 300 employees, or 10%, of the Company’s non-manufacturing workforce and be completed by the end of 2007. The Company cannot predict with certainty the expected completion date of the sale of its North Tyneside and Heilbronn facilities. The Company expects headcount to be reduced by approximately 1,000 additional employees upon the completion of sales of its North Tyneside and Heilbronn facilities.

The Company estimates that it will record restructuring and impairment charges in excess of $200 million in the fourth quarter of 2006 for fixed-asset write downs, severance and other expenses associated with the restructuring. Of this amount, approximately $20 million to $30 million will be related to severance and other expenses associated with the workforce reduction plan. The Company currently is not able to estimate the impairment charge associated with the sale of the North Tyneside, United Kingdom fabrication facility; however, the Company expects it will be significant. The Company currently does not expect the sale of the Heilbronn, Germany fabrication facility to result in an impairment charge.

A copy of the press release relating to this announcement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 2.06 Material Impairments

The information contained in Item 2.05 regarding the impairment charge associated with the sale of the North Tyneside, United Kingdom fabrication facility is incorporated herein by reference.

Item 8.01 Other Events

On December 11, 2006, the Company issued a press release entitled “Atmel Granted Conditional Nasdaq Listing.” A copy of this press release is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit No.	Description
99.1	Press release dated as of December 12, 2006, entitled “Atmel Announces Strategic Restructuring Initiatives to Accelerate Profitable Growth and Reduce Costs.”
99.2	Press release dated as of December 11, 2006 entitled “Atmel Granted Conditional Nasdaq Listing.”

2

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ATMEL CORPORATION
Date: December 12, 2006	By:	/s/ Robert Avery
		Robert Avery
		Vice President Finance & Chief Financial Officer

3

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release dated as of December 12, 2006, entitled “Atmel Announces Strategic Restructuring Initiatives to Accelerate Profitable Growth and Reduce Costs.”
99.2	Press release dated as of December 11, 2006 entitled “Atmel Granted Conditional Nasdaq Listing.”

EX-99.1

Exhibit 99.1

^®

N E W S   R E L E A S E

Atmel Announces Strategic Restructuring Initiatives to
Accelerate Profitable Growth and Reduce Costs

SAN JOSE, CA, December 12, 2006 . . . Atmel^® Corporation (NASDAQ: ATML), a global leader in the development and fabrication of advanced semiconductor solutions, today announced strategic restructuring initiatives designed to enhance profitability, accelerate the company’s growth and reduce costs. These initiatives include:

• A focus on the company’s high-growth, high-margin proprietary product lines. To better align Atmel’s resources with highest-growth opportunities, the company is redeploying resources to accelerate the design and development of leading-edge products that target expanding markets and is halting development on lesser, unprofitable, non-core products.

• Optimize Atmel’s manufacturing operations. Atmel will seek to sell its wafer fabrication facilities in North Tyneside, United Kingdom and Heilbronn, Germany. These actions are expected to increase manufacturing efficiencies by better utilizing remaining wafer fabrication facilities while reducing future capital expenditure requirements.

• The adoption of a fab-lite strategy. Through better utilization of its remaining wafer fabs and the expansion of its foundry relationships, Atmel will significantly reduce manufacturing costs and continue to design and develop innovative new products utilizing world-class manufacturing facilities.

The company anticipates cost savings in the range of $70 million to $80 million in 2007 reaching an annual rate of $80 million to $95 million by 2008. Included in the cost savings is approximately $55 million per year resulting from the expected sale of the wafer fabrication facilities. Through a combination of voluntary resignations, attrition and other actions, Atmel expects a reduction in its non-

Atmel Corporation • 2325 Orchard Parkway • San Jose CA 95131 • Phone (408) 441-0311 • Fax (408) 487-2600

manufacturing workforce of approximately 300 employees, or ten percent. The company anticipates headcount to be reduced by approximately 1,000 additional employees upon completion of the sales of the North Tyneside and Heilbronn wafer fabrication facilities.

Atmel will continue to meet the production needs of its worldwide customer base during this transition through the use of internal capacity and existing foundry partners. In addition, Atmel anticipates entering into a transition sourcing agreement with the eventual buyers of the wafer fabrication facilities.

“These initiatives follow a thorough analysis of the company’s operations and strongest opportunities for growth,” said Steven Laub, Atmel president and CEO. ”While this decision was difficult given the company’s many dedicated employees, these actions are essential to better position Atmel to compete and drive value for our shareholders. Focusing on our core business competencies, expanding our foundry relationships and the adoption of a fab-lite model are the right strategies for Atmel to better serve our customers, reduce manufacturing costs and enhance shareholder value.”

As a result of the initiatives announced today, the company estimates it will record one-time restructuring and impairment charges in excess of $200 million in the fourth quarter of 2006 for fixed asset write-downs, severance and other expenses associated with the restructuring. A significant portion of these non-recurring charges relate to the non-cash write-down of the North Tyneside manufacturing facility Atmel intends to sell.

Conference Call
Atmel will hold a teleconference at 6:00 a.m. PT tomorrow, December 13 to discuss today’s announcement. The conference call will be webcast live at www.atmel.com/ir and can be monitored by dialing 1-800-374-0405 or 1-706-634-5185. The conference ID number is 4088283.

A replay of this conference call will be available the same day at approximately 8:00 a.m. PT and will run for 72 hours. The replay access numbers are 1-800-642-1687 within the U.S. and 1-706-645-9291 for all other locations. The passcode is 4088283.

About Atmel
Atmel is a worldwide leader in the design and manufacture of microcontrollers, advanced logic, mixed-signal, nonvolatile memory and radio frequency (RF) components. Leveraging one of the industry’s broadest intellectual property (IP) technology portfolios, Atmel is able to provide the electronics

industry with complete system solutions. Focused on consumer, industrial, security, communications, computing and automotive markets, Atmel ICs can be found Everywhere You Are^®.

Information in this release regarding Atmel’s forecasts, outlook, expectations and beliefs are forward-looking statements that involve risks and uncertainties. These statements include statements about Atmel’s restructuring plans and other initiatives, the timing and extent of anticipated costs and benefits of the restructuring plans and other initiatives, the timing and extent of forecasted savings from such plans and initiatives, the timing and extent of anticipated restructuring and impairment charges, the number of employees affected, and the company’s ability to meet production needs during the restructuring. All forward-looking statements included in this release are based upon information available to Atmel as of the date of this release, which may change, and we assume no obligation to update any such forward-looking statement. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to such differences include the company’s inability to achieve its restructuring and other strategic goals, available manufacturing capacity of our outside foundry partners, the impact of competitive products and pricing, timely design acceptance by our customers, timely introduction of new technologies, ability to ramp new products into volume, industry wide shifts in supply and demand for semiconductor products, industry and/or company overcapacity, effective and cost efficient utilization of manufacturing capacity, financial stability in foreign markets, and other risks detailed from time to time in Atmel’s SEC reports and filings, including our Form 10-K, filed on March 16, 2006 and subsequent Form 10-Q reports

Contact: Robert Pursel, Director of Investor Relations, 1-408-487-2677

###

EX-99.2

Exhibit 99.2

^®

N E W S   R E L E A S E

Atmel Granted Conditional NASDAQ Listing

SAN JOSE, CA, December 11, 2006 . . . Atmel^® Corporation (NASDAQ: ATML), a global leader in the development and fabrication of advanced semiconductor solutions, today announced that the NASDAQ Listing Qualifications Panel has granted the company’s request for continued listing on the NASDAQ Stock Market subject to certain conditions.

On or before February 9, 2007 Atmel must file with the Securities and Exchange Commission its Forms 10-Q for its second quarter ended June 30, 2006 and third quarter ended September 30, 2006 as well as any necessary restatements for prior financial periods. The company must also be able to demonstrate compliance with all other requirements for continued listing on the Nasdaq Stock Market. In granting the extension, the Panel has required that through February 9, 2007 Atmel notify the Panel of the occurrence of any significant events, including any event that may call into question Atmel’s historical financial information or impact the company’s ability to comply with any NASDAQ listing requirement or satisfy the February 9, 2007 deadline. In addition, any submissions to the Panel, press releases, or public filings prepared by Atmel will be subject to review by the Panel, which may, at its discretion, request additional information before determining that Atmel has complied with the terms of the Panel’s decision.

As previously announced on July 25, 2006, the Audit Committee of the Company’s Board of Directors initiated an independent investigation regarding the timing of past stock option grants and other potentially related issues. The Audit Committee, with the assistance of independent legal and forensic accounting experts, has reached a preliminary determination that, in connection with the requirements of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB25”), the actual measurement dates for certain stock options differed from the recorded measurement dates for such stock options. Based on the Audit Committee’s preliminary determination, the Company expects that the difference in these measurement dates will result in material non-cash, stock-based

Atmel Corporation • 2325 Orchard Parkway • San Jose CA 95131 • Phone (408) 441-0311 • Fax (408) 487-2600

compensation expenses. The Company filed a Form 8-K on October 30, 2006 disclosing the decision of the Audit Committee that prior financial statements should no longer be relied upon.

The Audit Committee has not completed its work nor reached final conclusions and is continuing its investigation into the circumstances that gave rise to the differences. The Audit Committee is making every effort to complete its investigation, and the Company will make every effort to file its restated financial statements as soon as practicable after the completion of the investigation. There can be no assurance that Atmel will remain listed on the NASDAQ Global Market unless and until the company fully satisfies the terms of the Panel’s decision.

About Atmel
Atmel is a worldwide leader in the design and manufacture of microcontrollers, advanced logic, mixed-signal, nonvolatile memory and radio frequency (RF) components. Leveraging one of the industry’s broadest intellectual property (IP) technology portfolios, Atmel is able to provide the electronics industry with complete system solutions. Focused on consumer, industrial, security, communications, computing and automotive markets, Atmel ICs can be found Everywhere You Are^®.

Contact: Robert Pursel, Director of Investor Relations, 1-408-487-2677

###