INVESTMENTS

3 Months Ended

Mar. 31, 2012

INVESTMENTS

INVESTMENTS

Note 2 INVESTMENTS

Investments at March 31, 2012 and December 31, 2011 are primarily comprised of corporate equity securities, U.S. and foreign corporate debt securities, guaranteed variable annuities and auction-rate securities.

All marketable securities are deemed by management to be available-for-sale and are reported at fair value, with the exception of certain auction-rate securities as described below. Net unrealized gains and losses that are deemed to be temporary are reported within stockholders’ equity on the Company’s condensed consolidated balance sheets as a component of accumulated other comprehensive income. Unrealized losses that are deemed to be other than temporary are recorded in the condensed consolidated statement of operations in the period such determination is made. Gross realized gains or losses are recorded based on the specific identification method. For the three months ended March 31, 2012 and 2011, the Company’s gross realized gains or losses on short-term investments were insignificant. The Company’s investments are further detailed in the table below:

	March 31, 2012					December 31, 2011
	Adjusted Cost			Fair Value		Adjusted Cost			Fair Value
	(in thousands)
Corporate equity securities	$	3,936		$	8,716	$	—		$	—
Auction-rate securities	2,220			2,251		2,220			2,251
Corporate debt securities and other obligations	2,039			2,038		3,099			3,079
	$	8,195		$	13,005	$	5,319		$	5,330
Unrealized gains	4,811					31
Unrealized losses	(1		)			(20		)
Net unrealized gains	4,810					11
Fair value	$	13,005				$	5,330
Amount included in short-term investments				$	10,754				$	3,079
Amount included in other assets				2,251					2,251
				$	13,005				$	5,330

In September 2010, in connection with the sale of the Company’s smart card business in France to INSIDE Secure (“INSIDE”), the Company received an equity interest in INSIDE, which was privately-held at the time of the investment.  In February 2012, INSIDE successfully completed an initial public offering on the NYSE Euronext stock exchange in Paris.  As a result of that public offering, the Company reclassified its investment in INSIDE to short-term investments from other assets and now accounts for this investment as available for sale. Accordingly, an unrealized gain of $4.8 million was recorded in accumulated other comprehensive income in the three months ended March 31, 2012.

For the three months ended March 31, 2012, auctions for auction-rate securities held by the Company have continued to fail and as a result these securities continued to be illiquid. The Company concluded that $2.2 million (adjusted cost) of these securities are unlikely to be liquidated within the next twelve months and classified these securities as long-term investments, which are included in other assets on the condensed consolidated balance sheets.

Contractual maturities (at adjusted cost) of available-for-sale debt securities as of March 31, 2012, were as follows:

	(in thousands)
Due within one year	$	2,039
Due in 1-5 years	—
Due in 5-10 years	—
Due after 10 years	2,220
Total	$	4,259

Atmel has classified all investments with original maturity dates of 90 days or more as short-term as it has the ability and intent to redeem them within the year, with the exception of the Company’s remaining auction-rate securities, which have been classified as long-term investments and included in other assets on the condensed consolidated balance sheets.