OPERATING AND GEOGRAPHICAL SEGMENTS

6 Months Ended

Jun. 30, 2011

OPERATING AND GEOGRAPHICAL SEGMENTS

OPERATING AND GEOGRAPHICAL SEGMENTS

Note 9 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 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, and Atmel's 8051 8-bit products.

  •

  Nonvolatile Memories.  This segment includes serial interface electrically erasable programmable read-only memory ("SEEPROM"), serial and parallel interface Flash memory, and electrically erasable programmable read-only memory ("EEPROM") and erasable programmable ready-only memory ("EPROM") devices. This segment also includes products with military and aerospace applications.

  •

  Radio Frequency ("RF") and Automotive.  This segment includes automotive electronics, wireless and wired devices for industrial, consumer and automotive applications and foundry services for radio frequency products designed for mobile telecommunications markets.

  •

  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 in a broad variety of specific applications, including products that provide hardware security for embedded digital systems, products with military and aerospace applications and ASSPs for space applications, power management and secure crypto memory products.

        The Company evaluates segment performance based on revenues and income from operations excluding acquisition-related charges (credits), restructuring charges, asset impairment charges, and loss (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 management reassessing specific segments and the elements included within each of those segments. Recent events may affect the manner in which the Company presents segments in the future.

        Segments are defined by the products they design and sell. They do not make sales to each other. The Company's net revenues and segment income (loss) from operations for each reportable segment for the three and six months ended June 30, 2011 and 2010 are as follows:

• Information about Reportable Segments

	Micro- Controllers		Nonvolatile Memories		RF and Automotive		ASIC			Total
	(in thousands)
Three months ended June 30, 2011
Net revenues from external customers	$	302,192	$	71,263	$	52,571	$	52,616		$	478,642
Segment income from operations		75,450		16,171		5,397		15,001			112,019
Three months ended June 30, 2010
Net revenues from external customers		197,601		73,554		45,282		76,924			393,361
Segment income (loss) from operations		24,335		8,134		3,068		(5,667	)		29,870
Six months ended June 30, 2011
Net revenues from external customers	$	596,018	$	134,635	$	103,424	$	105,992		$	940,069
Segment income from operations		149,257		29,788		10,807		24,383			214,235
Six months ended June 30, 2010
Net revenues from external customers		348,508		151,054		91,755		150,593			741,910
Segment income (loss) from operations		35,694		12,423		2,424		(6,687	)		43,854

        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 Condensed Consolidated Statements of Operations

		Three Months Ended						Six Months Ended
		June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
		(in thousands)
Total segment income from operations		$	112,019		$	29,870		$	214,235		$	43,854
Unallocated amounts:
	Acquisition-related (charges) credits		(1,019	)		(1,167	)		(2,050	)		734
	Restructuring charges		-			(1,614	)		(21,210	)		(2,583	)
	Asset impairment charges		-			(11,922	)		-			(11,922	)
	(Loss) gain on sale of assets		-			(94,052	)		1,882			(94,052	)
Consolidated income (loss) from operations		$	111,000		$	(78,885	)	$	192,857		$	(63,969	)

        Geographic sources of revenues were as follows:

		Three Months Ended				Six Months Ended
		June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
		(in thousands)
United States		$	65,328	$	63,363	$	134,855	$	125,384
Germany			59,169		50,060		119,399		98,815
France			8,424		17,071		17,419		33,517
Japan			14,697		10,371		29,553		19,537
China, including Hong Kong			143,530		124,013		270,672		225,259
Singapore			12,129		11,260		23,289		20,758
South Korea			51,690		27,965		102,905		42,597
Taiwan			52,235		22,384		93,894		43,744
Rest of Asia-Pacific			13,560		16,919		34,356		31,024
Rest of Europe			50,521		43,146		101,061		88,608
Rest of the World			7,359		6,809		12,666		12,667
	Total net revenues	$	478,642	$	393,361	$	940,069	$	741,910

        Net revenues are attributed to countries based on the locations to where the Company ships.

        No single customer accounted for more than 10% of net revenues in any of the three or six months ended June 30, 2011 and 2010. Two distributors accounted for approximately 11% and 17% of accounts receivable at June 30, 2011. Two distributors accounted for approximately 14% and 12% of accounts receivable at December 31, 2010.

        Locations of long-lived assets as of June 30, 2011 and December 31, 2010 were as follows:

		2011		2010
		(in thousands)
United States		$	95,711	$	106,052
Germany			19,821		18,963
France			30,363		30,674
Philippines			75,332		65,049
Asia-Pacific			66,593		47,524
Rest of Europe			9,073		13,513
	Total	$	296,893	$	281,775

        Excluded from the table above are auction-rate securities of $2,251 as of both June 30, 2011 and December 31, 2010, which are included in other assets on the condensed consolidated balance sheets. Also excluded from the table above as of June 31, 2011 and December 31, 2010 are goodwill of $57,199 and $54,676, respectively, intangible assets, net of $14,057 and $17,603, respectively, and deferred income tax assets of $144,206 and $140,562, respectively.