##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission file
    number: 0-19032
 ATMEL CORPORATION
 (Exact name of registrant as
    specified in its charter)
  Delaware

77-0051991(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   2325
    Orchard Parkway, San Jose, California 95131
    (Address of principal executive offices)
  Registrants telephone number, including area code:
 (408) 441-0311
      Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Exchange on Which RegisteredCommon Stock, par value $0.001 per share

The NASDAQ Stock Market LLC
    (NASDAQ Global Select Market)    Securities registered pursuant to Section 12(g) of the
    Act:
 Preferred Share Right (currently attached to and trading with
    the Common Stock)
     o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated
    filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K




---



##### 





TABLE OF
    CONTENTS
  PART IITEM 1.

BUSINESS


1ITEM 1A.

RISK FACTORS


11ITEM 1B.

UNRESOLVED STAFF COMMENTS


27ITEM 2.

PROPERTIES


27ITEM 3.

LEGAL PROCEEDINGS


28ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


30PART IIITEM 5.

MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
    MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES


31ITEM 6.

SELECTED FINANCIAL DATA


32ITEM 7.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS


34ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


60ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


63ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE


118ITEM 9A.

CONTROLS AND PROCEDURES


118ITEM 9B.

OTHER INFORMATION


119PART IIIITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE


119ITEM 11.

EXECUTIVE COMPENSATION


119ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
    AND RELATED STOCKHOLDER MATTERS


119ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE


120ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES


120PART IVITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES


121SIGNATURES


123EXHIBIT INDEXEXHIBIT 10.14EXHIBIT 10.15EXHIBIT 10.16EXHIBIT 10.17EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2




---



##### Table of Contents



PART I ITEM 1.
    BUSINESS  FORWARD
    LOOKING STATEMENTS
  You should read the following discussion in conjunction with
    our Consolidated Financial Statements and the related
    Notes to Consolidated Financial Statements, and
    Financial Statements and Supplementary Data included
    in this Annual Report on
    Form 10-K.
    This discussion contains forward-looking statements within the
    meaning of Section 21E of the Securities Exchange Act of
    1934, particularly statements regarding our outlook for 2008,
    our expectations regarding the effects of exchange rates, our
    strategic plans, restructuring and other initiatives, and
    statements regarding our future prospects. Our actual results
    could differ materially from those projected in the
    forward-looking statements as a result of a number of factors,
    risks and uncertainties, including the risk factors set forth in
    this discussion and in Item 1A  Risk Factors,
    and elsewhere in this
    Form 10-K.
    Generally, the words may, will,
    could, would, anticipate,
    expect, intend, believe,
    seek, estimate, plan,
    view, continue, the plural of such
    terms, the negatives of such terms, or other comparable
    terminology and similar expressions identify forward-looking
    statements. The information included in this
    Form 10-K
    is provided as of the filing date with the Securities and
    Exchange Commission and future events or circumstances could
    differ significantly from the forward-looking statements
    included herein. Accordingly, we caution readers not to place
    undue reliance on such statements. Atmel undertakes no
    obligation to update any forward-looking statements in this
    Form 10-K.
  BUSINESS
  General
  system-on-a-chip
  (408) 441-0311. Form 10-K, Form 10-Q, Form 8-K, 1-800-SEC-0330,
 1




---



##### Table of Contents



Products
      
    Application specific integrated circuit (ASIC)segment includes customer and application specific
    integrated circuits designed to meet specialized single-customer
    requirements for their high performance devices in a broad
    variety of specific applications. This segment also encompasses
    a range of products which provide security for digital data
    transactions, including smart cards for mobile phones, set top
    boxes, banking and national identity cards. We also develop
    customer specific products for high reliability space
    applications, and secure memory products.
    Microcontrollerssegment includes a variety of
    proprietary and standard microcontrollers, the majority of which
    contain embedded nonvolatile memory and integrated analog
    peripherals.
    Nonvolatile Memoriessegment consists predominantly of
    serial interface electrically erasable programmable read-only
    memory (SEEPROM) and serial interface Flash memory
    products. This segment also includes parallel interface Flash
    memories as well as mature parallel interface electrically
    erasable programmable read-only memory (EEPROM) and
    erasable programmable read-only memory (EPROM)
    devices.
    Radio Frequency (RF) and Automotivesegment
    includes products primarily designed for the automotive
    industry. This segment produces and sells wireless and wired
    devices for industrial, consumer and automotive applications and
    it also provides foundry services which produce radio frequency
    products for the mobile telecommunications market.    ASIC
  Custom ASICs. time-to-market
    CAPtm. system-on-chip
  Secure Microcontrollers.
 2




---



##### Table of Contents



® tm
  ® ® tm
    FPGAs. ® FPGA-to-gate
    Microcontrollers
    computer-on-a-chip
  AVR. ® ® ®
  ARM.
 3




---



##### Table of Contents



8051.
    Nonvolatile
    Memories
  Serial Interface Products
  DataFlash ® ®
    Flash Memory Products.
    Parallel-Interface EEPROMs.
 4




---



##### Table of Contents



EPROMs.
  RF and
    Automotive
  Automotive RF.
  High Voltage.
  RF.
  DVD.
  Mixed Signal.
  Technology
    state-of-the-art
 5




---



##### Table of Contents



Principal
    Markets and Customers
  Communications. ,
    Consumer Electronics.
  Computing, Storage and Printing.
  Security.
  Automotive.
 6




---



##### Table of Contents



Military and Aerospace. latch-up
  Manufacturing
            Irving,
    Texas, Facility
   7




---



##### Table of Contents



North
    Tyneside, United Kingdom, and Heilbronn, Germany,
    Facilities
            Environmental
    Compliance
     8




---



##### Table of Contents



Marketing
    and Sales
        non-U.S. based
  Research
    and Development
      Competition
   9




---



##### Table of Contents




    our success in designing and manufacturing new products that
    implement new technologies and processes
    our ability to offer integrated solutions using our advanced
    nonvolatile memory process with other technologies
    the rate at which customers incorporate our products into their
    systems
    product introductions by our competitors
    the number and nature of our competitors in a given market
    the incumbency of our competitors products, and
    general market and economic conditions.    Patents
    and Licenses
       10




---



##### Table of Contents



Employees
    Backlog
    Geographic
    Areas
      Seasonality
  quarter-to-quarter period-to-period
  ITEM 1A.
    RISK
    FACTORS  Form 10-K, Form 10-K
 11




---



##### Table of Contents



OUR
    REVENUES AND OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY DUE
    TO A VARIETY OF FACTORS, WHICH MAY RESULT IN VOLATILITY OR A
    DECLINE IN OUR STOCK PRICE.
    
    the nature of both the semiconductor industry and the markets
    addressed by our products;
    our transition to a fab-lite strategy;
    our increased dependence on outside foundries and their ability
    to meet our volume, quality, and delivery objectives,
    particularly during times of increasing demand along with
    inventory excesses or shortages due to reliance on third party
    manufacturers;
    our compliance with U.S. trade and export laws and
    regulations;
    fluctuations in currency exchange rates and revenues and costs
    denominated in foreign currencies;
    ability of independent assembly contractors to meet our volume,
    quality, and delivery objectives;
    success with disposal or restructuring activities, including
    disposition of our North Tyneside and Heilbronn facilities;
    fluctuations in manufacturing yields;
    third party intellectual property infringement claims;
    the highly competitive nature of our markets;
    the pace of technological change;
    political and economic risks;
    natural disasters or terrorist acts;
    assessment of internal controls over financial reporting;
    ability to meet our debt obligations;
    availability of additional financing;
    potential impairment and liquidity of auction rate securities;
    our ability to maintain good relationships with our customers;
    long-term contracts with our customers;
    integration of new businesses or products;
    our compliance with international, federal and state export,
    environmental, privacy and other regulations;
    personnel changes;
    business interruptions;
    system integration disruptions;
    anti-takeover effects in our certificate of incorporation,
    bylaws, and preferred shares rights agreement;
    changes in accounting rules, such as recording expenses for
    employee stock option grants;
    foreign pension plans are unfunded and any requirement to fund
    these plans could negatively impact or cash position;
    acquisition strategy may result in unanticipated accounting
    charges or otherwise adversely affect or results of operations 12




---



##### Table of Contents




    we may not be able to effectively utilize all of our
    manufacturing capacity;
    disruptions to the availability of raw materials can disrupt our
    ability to supply products to our customers;
    product liability claims may arise resulting in significant
    costs and damage to reputation;
    revenues are dependent on selling through distributors;
    audits of our income tax returns, both in the U.S. and in
    foreign jurisdictions; and
    compliance with economic incentive terms in certain government
    grants.        THE
    CYCLICAL NATURE OF THE SEMICONDUCTOR INDUSTRY CREATES
    FLUCTUATIONS IN OUR OPERATING RESULTS.
       13




---



##### Table of Contents



quarter-to-quarter period-to-period
  WE COULD
    EXPERIENCE DISRUPTION OF OUR BUSINESS AS WE TRANSITION TO A
    FAB-LITE
    STRATEGY, AND INCREASE DEPENDENCE ON OUTSIDE FOUNDRIES, WHERE
    SUCH FOUNDRIES MAY NOT HAVE ADEQUATE CAPACITY TO FULFILL OUR
    NEEDS AND MAY NOT MEET OUR QUALITY AND DELIVERY OBJECTIVES OR
    MAY ABANDON FABRICATION PROCESSES THAT WE REQUIRE.
      
    reduced control over delivery schedules and product costs;
    manufacturing costs that are higher than anticipated;
    inability of our manufacturing subcontractors to develop
    manufacturing methods appropriate for our products and their
    unwillingness to devote adequate capacity to produce our
    products;
    possible abandonment of fabrication processes by our
    manufacturing subcontractors for products that are strategically
    important to us;
    decline in product quality and reliability;
    inability to maintain continuing relationships with our
    suppliers;
    restricted ability to meet customer demand when faced with
    product shortages; and
    increased opportunities for potential misappropriation of our
    intellectual property.     14




---



##### Table of Contents



WE BUILD
    SEMICONDUCTORS BASED ON FORECASTED DEMAND, AND AS A RESULT,
    CHANGES TO FORECASTS FROM ACTUAL DEMAND MAY RESULT IN EXCESS
    INVENTORY OR OUR INABILITY TO FILL CUSTOMER ORDERS ON A TIMELY
    BASIS WHICH MAY HARM OUR BUSINESS.
        OUR
    INTERNATIONAL SALES AND OPERATIONS ARE SUBJECT TO APPLICABLE
    LAWS RELATING TO TRADE AND EXPORT CONTROLS, THE VIOLATION OF
    WHICH COULD ADVERSELY AFFECT OUR OPERATIONS.
   15




---



##### Table of Contents



WE ARE
    EXPOSED TO FLUCTUATIONS IN CURRENCY EXCHANGE RATES THAT COULD
    NEGATIVELY IMPACT OUR FINANCIAL RESULTS AND CASH FLOWS, AND
    REVENUES AND COSTS DENOMINATED IN FOREIGN CURRENCIES COULD
    ADVERSELY IMPACT OUR OPERATING RESULTS WITH CHANGES IN THESE
    FOREIGN CURRENCIES AGAINST THE DOLLAR.
          WE DEPEND
    ON INDEPENDENT ASSEMBLY CONTRACTORS WHICH MAY NOT HAVE ADEQUATE
    CAPACITY TO FULFILL OUR NEEDS AND WHICH MAY NOT MEET OUR QUALITY
    AND DELIVERY OBJECTIVES.
    WE FACE
    RISKS ASSOCIATED WITH DISPOSAL OR RESTRUCTURING
    ACTIVITIES.
   16




---



##### Table of Contents



IF WE ARE
    UNABLE TO IMPLEMENT NEW MANUFACTURING TECHNOLOGIES OR FAIL TO
    ACHIEVE ACCEPTABLE MANUFACTURING YIELDS, OUR BUSINESS WOULD BE
    HARMED.
        WE MAY
    FACE THIRD PARTY INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS THAT
    COULD BE COSTLY TO DEFEND AND RESULT IN LOSS OF SIGNIFICANT
    RIGHTS.
     17




---



##### Table of Contents



OUR
    MARKETS ARE HIGHLY COMPETITIVE, AND IF WE DO NOT COMPETE
    EFFECTIVELY, WE MAY SUFFER PRICE REDUCTIONS, REDUCED REVENUES,
    REDUCED GROSS MARGINS, AND LOSS OF MARKET SHARE.
      
    our success in designing and manufacturing new products that
    implement new technologies and processes;
    our ability to offer integrated solutions using our advanced
    nonvolatile memory process with other technologies;
    the rate at which customers incorporate our products into their
    systems;
    product introductions by our competitors;
    the number and nature of our competitors in a given market;
    the incumbency of our competitors at potential new customers;
    our ability to minimize production costs by outsourcing our
    manufacturing, assembly and testing functions; and
    general market and economic conditions.    WE MUST
    KEEP PACE WITH TECHNOLOGICAL CHANGE TO REMAIN
    COMPETITIVE.
   18




---



##### Table of Contents



OUR
    OPERATING RESULTS ARE HIGHLY DEPENDENT ON OUR INTERNATIONAL
    SALES AND OPERATIONS, WHICH EXPOSES US TO VARIOUS POLITICAL AND
    ECONOMIC RISKS.
    
    greater difficulty in protecting intellectual property;
    reduced flexibility and increased cost of staffing adjustments,
    particularly in France and Germany;
    longer collection cycles;
    potential unexpected changes in regulatory practices, including
    export license requirements, trade barriers, tariffs and tax
    laws, environmental and privacy regulations; and
    general economic and political conditions in these foreign
    markets.      OUR
    OPERATIONS AND FINANCIAL RESULTS COULD BE HARMED BY NATURAL
    DISASTERS OR TERRORIST ACTS.
   19




---



##### Table of Contents



A LACK OF
    EFFECTIVE INTERNAL CONTROL OVER FINANCIAL REPORTING COULD RESULT
    IN AN INABILITY TO ACCURATELY REPORT OUR FINANCIAL RESULTS,
    WHICH COULD LEAD TO A LOSS OF INVESTOR CONFIDENCE IN OUR
    FINANCIAL REPORTS AND HAVE AN ADVERSE EFFECT ON OUR STOCK
    PRICE.
      OUR DEBT
    LEVELS COULD HARM OUR ABILITY TO OBTAIN ADDITIONAL
    FINANCING, AND OUR ABILITY TO MEET OUR DEBT OBLIGATIONS WILL BE
    DEPENDENT UPON OUR FUTURE PERFORMANCE.
  debt-to-equity
       20




---



##### Table of Contents



WE MAY
    NEED TO RAISE ADDITIONAL CAPITAL THAT MAY NOT BE
    AVAILABLE.
    A
    SUBSTANTIAL PORTION OF OUR SHORT-TERM INVESTMENT PORTFOLIO IS
    INVESTED IN HIGHLY-RATED AUCTION RATE SECURITIES. FAILURES IN
    THESE AUCTIONS MAY AFFECT OUR LIQUIDITY, WHILE RATING DOWNGRADES
    OF THE SECURITY ISSUER AND/OR THE THIRD-PARTIES INSURING SUCH
    INVESTMENTS MAY REQUIRE US TO ADJUST THE CARRYING VALUE OF THESE
    INVESTMENTS THROUGH AN IMPAIRMENT CHARGE.
    PROBLEMS
    THAT WE EXPERIENCE WITH KEY CUSTOMERS OR DISTRIBUTORS MAY HARM
    OUR BUSINESS.
      WE ARE
    NOT PROTECTED BY LONG-TERM CONTRACTS WITH OUR
    CUSTOMERS.
   21




---



##### Table of Contents



OUR
    FAILURE TO SUCCESSFULLY INTEGRATE BUSINESSES OR PRODUCTS WE HAVE
    ACQUIRED COULD DISRUPT OR HARM OUR ONGOING BUSINESS.
    day-to-day
    WE ARE
    SUBJECT TO ENVIRONMENTAL REGULATIONS, WHICH COULD IMPOSE
    UNANTICIPATED REQUIREMENTS ON OUR BUSINESS IN THE FUTURE. ANY
    FAILURE TO COMPLY WITH CURRENT OR FUTURE ENVIRONMENTAL
    REGULATIONS MAY SUBJECT US TO LIABILITY OR SUSPENSION OF OUR
    MANUFACTURING OPERATIONS.
     22




---



##### Table of Contents



WE DEPEND
    ON CERTAIN KEY PERSONNEL, AND THE LOSS OF ANY KEY PERSONNEL MAY
    SERIOUSLY HARM OUR BUSINESS.
    BUSINESS
    INTERRUPTIONS COULD HARM OUR BUSINESS.
    SYSTEM
    INTEGRATION DISRUPTIONS COULD HARM OUR BUSINESS.
    PROVISIONS
    IN OUR RESTATED CERTIFICATE OF INCORPORATION, BYLAWS AND
    PREFERRED SHARES RIGHTS AGREEMENT MAY HAVE ANTI-TAKEOVER
    EFFECTS.
      CHANGES
    IN STOCK OPTION ACCOUNTING RULES MAY ADVERSELY IMPACT OUR
    REPORTED OPERATING RESULTS, OUR STOCK PRICE, AND OUR ABILITY TO
    OFFER COMPETITIVE COMPENSATION ARRANGEMENTS WITH OUR
    EMPLOYEES.
       23




---



##### Table of Contents



OUR
    FOREIGN PENSION PLANS ARE UNFUNDED, AND ANY REQUIREMENT TO
    FUND THESE PLANS IN THE FUTURE COULD NEGATIVELY IMPACT
    OUR CASH POSITION AND OPERATING CAPITAL.
    OUR
    ACQUISITION STRATEGY MAY RESULT IN UNANTICIPATED ACCOUNTING
    CHARGES OR OTHERWISE ADVERSELY AFFECT OUR RESULTS OF OPERATIONS,
    AND RESULT IN DIFFICULTIES IN ASSIMILATING AND INTEGRATING THE
    OPERATIONS, PERSONNEL, TECHNOLOGIES, PRODUCTS AND INFORMATION
    SYSTEMS OF ACQUIRED COMPANIES OR BUSINESSES, OR BE DILUTIVE TO
    EXISTING SHAREHOLDERS.
     24




---



##### Table of Contents



WE MAY
    NOT BE ABLE TO EFFECTIVELY UTILIZE ALL OF OUR MANUFACTURING
    CAPACITY, WHICH MAY NEGATIVELY IMPACT OUR BUSINESS.
     25




---



##### Table of Contents



DISRUPTIONS
    TO THE AVAILABILITY OF RAW MATERIALS CAN DISRUPT OUR ABILITY TO
    SUPPLY PRODUCTS TO OUR CUSTOMERS, WHICH COULD SERIOUSLY HARM OUR
    BUSINESS.
    WE COULD
    FACE PRODUCT LIABILITY CLAIMS THAT RESULT IN SIGNIFICANT COSTS
    AND DAMAGE TO REPUTATION WITH CUSTOMERS, WHICH WOULD NEGATIVELY
    IMPACT OUR OPERATING RESULTS.
        OUR
    REVENUES ARE DEPENDENT ON SELLING THROUGH
    DISTRIBUTORS.
     26




---



##### Table of Contents



THE
    OUTCOME OF CURRENTLY ONGOING AND FUTURE AUDITS OF OUR INCOME TAX
    RETURNS, BOTH IN THE US AND IN FOREIGN JURISDICTIONS, COULD HAVE
    AN ADVERSE AFFECT ON OUR NET INCOME (LOSS) AND FINANCIAL
    CONDITION.
    IF WE ARE
    UNABLE TO COMPLY WITH ECONOMIC INCENTIVE TERMS IN CERTAIN
    GOVERNMENT GRANTS, WE MAY NOT BE ABLE TO RECEIVE OR RECOGNIZE
    GRANT BENEFITS OR WE MAY BE REQUIRED TO REPAY GRANT BENEFITS
    PREVIOUSLY PAID TO US AND RECOGNIZE RELATED CHARGES, WHICH WOULD
    ADVERSELY AFFECT OUR OPERATING RESULTS AND FINANCIAL
    POSITION.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    Number ofBuildings

Location

Total Square Feet


Use1

San Jose, California


291,000


Headquarters offices, research and development, sales and
    marketing, product design, final product testing6

Colorado Springs, Colorado


603,000


Wafer fabrication, research and development, marketing, product
    design, final product testing5

Rousset, France


815,000


Wafer fabrication, research and development, marketing, product
    design, final product testing4

Heilbronn, Germany


778,000


Wafer fabrication, research and development, marketing, product
    design, final product testing (74% of square footage is leased
    to other companies)2

Calamba City, Philippines


338,000


Final product testing    27




---



##### Table of Contents



ITEM 3.
    LEGAL
    PROCEEDINGS         28




---



##### Table of Contents



29




---



##### Table of Contents



ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS    Executive
    Officers of the Registrant
    Name

Age

PositionSteven Laub


49


President and Chief Executive Officer and DirectorTsung-Ching Wu


57


Executive Vice President, Office of the President and DirectorWalter Lifsey


49


Executive Vice President, OperationsRobert Avery


59


Vice President Finance and Chief Financial OfficerRobert McConnell


63


Vice President and General Manager, RF and Automotive SegmentBernard Pruniaux


66


Vice President and General Manager, ASIC SegmentRod Erin


59


Vice President, Non-Volatile Memory Segment            30




---



##### Table of Contents



PART II  ITEM 5.
    MARKET
    FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
    MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES    High


LowYear ended December 31, 2006:First Quarter

$
5.10


$
3.06Second Quarter

$
5.71


$
4.22Third Quarter

$
6.43


$
3.71Fourth Quarter

$
6.38


$
4.79Year ended December 31, 2007:First Quarter

$
6.30


$
4.96Second Quarter

$
5.86


$
5.00Third Quarter

$
5.99


$
4.55Fourth Quarter

$
5.65


$
4.31      31




---



##### Table of Contents



Total Number

Maximumof Shares

NumberPurchased as

of SharesPart of

that May yetTotal Number

Average Price

Publicly

Be Purchasedof Shares

Paid per

Announced Plans

Under the PlansPeriod

Purchased

Share

or Programs

or Programs(1)Oct. 1 to Oct. 31














Nov. 1 to Nov. 30


5,555,891



(1
)


5,555,891



Dec. 1 to Dec. 31














Total


5,555,891



(1
)


5,555,891



     (1)
    
    On August 26, 2007, we entered into collared accelerated
    share repurchase program with each of Morgan Stanley &
    Co. Incorporated and Credit Suisse, New York Branch (the
    dealers) to repurchase up to an aggregate of
    $250 million of our common stock. Pursuant to the terms of
    the transactions, we prepaid $125 million to each dealer
    shortly after execution of the transactions, and we agreed to
    purchase up to $125 million of our common stock from each
    dealer. The aggregate number of shares actually purchased was
    determined based on the volume weighted average share price of
    our common stock during a specified period of time, subject to
    certain provisions that established a minimum and maximum number
    of shares that may be repurchased by us. In September 2007, the
    dealers delivered an aggregate of 43 million shares to us,
    which was the minimum number of shares to be repurchased by us.
    On November 5, 2007, we received approximately
    3 million additional shares from Morgan Stanley &
    Co. Incorporated and on November 13, 2007, we received
    approximately 3 million additional shares from Credit
    Suisse, New York Branch. The total number of shares repurchased
    under the program was approximately 49 million, which were
    retired. No additional shares are expected to be repurchased
    pursuant to the collared accelerated share repurchase program.
    The effective price per share of all shares repurchased under
    the program was $5.11.  ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K.
  Years Ended December 31,2007


2006


2005


2004


2003(In thousands, except per share data)Net revenues

$
1,639,237


$
1,670,887


$
1,561,107


$
1,552,440


$
1,236,295Income (loss) from continuing operations before income
    taxes(1)(5)


55,709



(73,702
)


(62,690
)


18,842



(126,795
)Income (loss) from continuing operations


47,885



(98,651
)


(49,627
)


(5,502
)


(128,008
)Income from discontinued operations, net of provision for income
    taxes






12,969



16,276



11,874



7,425Gain on sale of discontinued operations, net of provision for
    income taxes(2)






100,332











Net income (loss)

$
47,885


$
14,650


$
(33,351
)

$
6,372


$
(120,583
) 32




---



##### Table of Contents



Years Ended December 31,2007


2006


2005


2004


2003(In thousands, except per share data)Basic net income (loss) per share:Income (loss) from continuing operations

$
0.10


$
(0.20
)

$
(0.10
)

$
(0.01
)

$
(0.27
)Income (loss) from discontinued operations, net of provision for
    income taxes






0.02



0.03



0.02



0.01Gain on sale of discontinued operations, net of provision for
    income taxes






0.21











Net income (loss)

$
0.10


$
0.03


$
(0.07
)

$
0.01


$
(0.26
)Weighted-average shares used in basic net income (loss) per
    share calculations


477,213



487,413



481,534



476,063



469,869Diluted net income (loss) per share:Income (loss) from continuing operations

$
0.10


$
(0.20
)

$
(0.10
)

$
(0.01
)

$
(0.27
)Income from discontinued operations, net of provision for income
    taxes






0.02



0.03



0.02



0.01Gain on sale of discontinued operations, net of provision for
    income taxes






0.21











Net income (loss)

$
0.10


$
0.03


$
(0.07
)

$
0.01


$
(0.26
)Weighted-average shares used in diluted net income (loss) per
    share calculations


481,737



487,413



481,534



476,063



469,869   As of December 31,2007


2006


2005


2004


2003Cash and cash equivalents

$
374,130


$
410,480


$
300,323


$
346,350


$
385,887Cash and cash equivalents and short-term investments


429,947



466,744



348,255



405,208



431,054Fixed assets, net(3)


579,566



602,290



874,618



1,185,727



1,101,400Total assets


1,702,753



1,818,539



1,933,936



2,331,236



2,158,817Long-term debt less current portion(4)


20,408



60,333



133,479



323,950



357,796Stockholders equity


823,479



953,894



937,371



1,107,568



1,003,764     (1)
    
    We recorded asset impairment charges (recovery) of
    $(1) million, $83 million, $13 million and
    $27 million in 2007, 2006, 2005 and 2003, respectively, and
    restructuring charges of $13 million, $9 million, and
    $4 million in 2007, 2006 and 2005, respectively, related to
    employee termination costs, as well as industry changes and the
    related realignment of our businesses in response to those
    changes. We recorded $13 million related to loss on sale
    and other charges in 2005. We also recorded $1 million and
    $30 million in charges for grant repayments in 2007 and
    2006, respectively.(2)
    
    On July 31, 2006, we sold our Grenoble, France, subsidiary
    to e2v technologies plc, a British corporation, for
    approximately $140 million. We recorded a gain on the sale
    of approximately $100 million, net of assets transferred,
    working capital adjustments and accrued income taxes. 33




---



##### Table of Contents



(3)
    
    Fixed assets, net was reduced (increased) for the respective
    periods as a result of the impairment charges (recovery)
    discussed in (1) above. Additionally, we reclassified
    $35 million in fixed assets to assets held for sale as of
    December 31, 2006, relating to our Irving, Texas,
    facilities.(4)
    
    On May 23, 2006, substantially all of the convertible notes
    outstanding at the time were redeemed for approximately
    $144 million. The remaining balance of approximately
    $1 million was called by Atmel in June 2006.(5)
    
    On January 1, 2006, we adopted SFAS No. 123R
    Share-Based Payment. It required us to measure all
    employee stock-based compensation awards using a fair value
    method and record such expense in our consolidated financial
    statements. As a result, we recorded pre-tax, stock-based
    compensation expense of $17 million and $9 million in
    2007 and 2006, respectively, under SFAS No. 123R.  ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  You should read the following discussion of our financial
    condition and results of operations in conjunction with our
    Consolidated Financial Statements and the related Notes to
    Consolidated Financial Statements, and Financial
    Statement Schedules and Supplementary Financial
    Data included in this Annual Report on
    Form 10-K.
    This discussion contains forward-looking statements within the
    meaning of Section 21E of the Securities Exchange Act of
    1934, particularly statements regarding our outlook for 2008.
    Our actual results could differ materially from those projected
    in the forward-looking statements as a result of a number of
    factors, risks and uncertainties, including the risk factors set
    forth in this discussion, and under the caption
    ITEM 1A RISK FACTORS, and elsewhere in this
    Form 10-K.
    Generally, the words may, will,
    could, would, anticipate,
    expect, intend, believe,
    seek, estimate, plan,
    view, continue, the plural of such
    terms, the negatives of such terms, or other comparable
    terminology and similar expressions identify forward-looking
    statements. The information included in this
    Form 10-K
    is provided as of the filing date with the SEC and future events
    or circumstances could differ significantly from the
    forward-looking statements included herein. Accordingly, we
    caution readers not to place undue reliance on such statements.
    Atmel undertakes no obligation to update any forward-looking
    statements in this
    Form 10-K.
  Overview
    of Fiscal 2007 Significant Transactions
       34




---



##### Table of Contents



Overview
    of 2007 Operating Results
             35




---



##### Table of Contents



RESULTS
    OF CONTINUING OPERATIONS
  Years EndedDecember 31, 2007


December 31, 2006


December 31, 2005(In thousands, except percentage of net revenues)Net revenues

$
1,639,237



100.0
%

$
1,670,887



100.0
%

$
1,561,107



100.0
%Gross profit


580,231



35.4
%


562,118



33.6
%


395,769



25.4
%Research and development expenses


272,041



16.6
%


289,108



17.3
%


268,164



17.2
%Selling, general and administrative expenses


242,811



14.8
%


213,641



12.8
%


184,876



11.8
%Charges for grant repayments


1,464



0.1
%


30,034



1.8
%






Asset impairment charges (recovery)


(1,057
)


(0.1
)%


82,582



4.9
%


12,757



0.8
%Restructuring charges


13,239



0.8
%


8,729



0.5
%


4,483



0.3
%Loss on sale and other charges






0.0
%






0.0
%


13,199



3.3
%Income (loss) from operations

$
51,733



3.2
%

$
(61,976
)


(3.7
)%

$
(87,710
)


(5.6
)%   Net
    Revenues
     36




---



##### Table of Contents



Net
    Revenues  By Operating Segment
    % of Net


Change


% ChangeSegment

2007


Revenues


from 2006


from 2006(In thousands, except percentage of net revenues)ASIC

$
495,815



30
%

$
(5,883
)


(1)
%Microcontroller


458,228



28
%


49,834



12
%Nonvolatile Memory


376,675



23
%


1,356



0
%RF and Automotive


308,519



19
%


(76,957
)


(20)
%Net revenues

$
1,639,237



100
%

$
(31,650
)


(2)
%   % of Net


Change


% ChangeSegment

2006


Revenues


from 2005


from 2005ASIC

$
501,698



30
%

$
(32,525
)


(6)
%Microcontroller


408,394



24
%


131,623



48
%Nonvolatile Memory


375,319



22
%


(17,736
)


(5)
%RF and Automotive


385,476



23
%


28,418



8
%Net revenues

$
1,670,887



100
%

$
109,780



7
%   % of NetSegment

2005


RevenuesASIC

$
534,223



34
%Microcontroller


276,771



18
%Nonvolatile Memory


393,055



25
%RF and Automotive


357,058



23
%Net revenues

$
1,561,107



100
%      37




---



##### Table of Contents



ASIC
        Microcontroller
      Nonvolatile
    Memory
   38




---



##### Table of Contents



RF and
    Automotive
      Net
    Revenues by Geographic Area
    Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(In thousands)United States

$
219,541


$
241,379


$
210,399Europe


571,476



541,254



455,550Asia


827,418



874,226



876,864Rest of World*


20,802



14,028



18,294$
1,639,237


$
1,670,887


$
1,561,107  39




---



##### Table of Contents



*
    
    Primarily includes South Africa, and Central and South America              Revenues
    and Costs  Impact from Changes to Foreign Exchange
    Rates
   40




---



##### Table of Contents



Cost of
    Revenues and Gross Margin
      lower-of-cost
   41




---



##### Table of Contents



Research
    and Development
            Selling,
    General and Administrative
     42




---



##### Table of Contents



Charges
    for Grant Repayments
        Asset
    Impairment Charges (Recovery)
  held-and-used held-for-sale
  North
    Tyneside, United Kingdom, and Heilbronn, Germany,
    Facilities
   43




---



##### Table of Contents



held-for-sale
        Irving,
    Texas, Facility
   44




---



##### Table of Contents



Restructuring
    Charges
    January 1,








Currency


December 31,2007


Charges/





Translation


2007Accrual


(Credits)


Payments


Adjustment


Accrual(In thousands)Third quarter of 2002Termination of contract with supplier

$
8,896


$
(3,071
)

$
(4,233
)

$



$
1,592Fourth quarter of 2006Employee termination costs


7,490



3,305



(9,959
)


488



1,324Fourth quarter of 2007Employee termination costs






12,441







318



12,759Other exit related costs






564



(564
)






Total 2007 activity

$
16,386


$
13,239


$
(14,756
)

$
806


$
15,675   January 1,








December 31,2006








2006Accrual


Charges


Payments


Accrual(In thousands)Third quarter of 2002Termination of contract with supplier

$
9,833


$



$
(937
)

$
8,896Third quarter of 2005Employee termination costs


1,246







(1,246
)


Fourth quarter of 2005Employee termination costs


1,223







(1,223
)


First quarter of 2006Employee termination costs






151



(151
)


Fourth quarter of 2006Employee termination costs






8,578



(1,088
)


7,490Total 2006 activity

$
12,302


$
8,729


$
(4,645
)

$
16,386   45




---



##### Table of Contents



January 1,








December 31,2005








2005Accrual


Charges


Payments


Accrual(In thousands)Third quarter of 2002Termination of contract with supplier

$
10,919


$



$
(1,086
)

$
9,833Third quarter of 2005Employee termination costs






2,452



(1,206
)


1,246Fourth quarter of 2005Employee termination costs






2,031



(808
)


1,223Total 2005 activity

$
10,919


$
4,483


$
(3,100
)

$
12,302   2007
    Restructuring Activities
      
    Charges of $11 million related to one-time severance costs
    for involuntary termination of employees. These employee
    severance costs were recorded in accordance with SFAS No.
    146, Accounting for Costs Associated with exit or Disposal
    Activities (SFAS No. 146).
    Charges of $1 million related to on-going severance costs
    for involuntary termination of employees. These employee
    severance costs were recorded in accordance with
    SFAS No. 112, Employers Accounting for
    Post Employment Benefits
    (SFAS No. 112).
    Charges of $1 million related to other exit related costs.
    These costs were recorded in accordance with
    SFAS No. 146.    
    Charges of $2 million related to severance costs for
    involuntary termination of employees. These employee severance
    costs were recorded in accordance with SFAS No. 146.
    Charges of $1 million related to one-time minimum statutory
    termination benefits, including changes in estimates, recorded
    in accordance with SFAS No. 112.
    A credit of $3 million related to the settlement of a
    long-term gas supply contract for which the accrual was
    $12 million, originally recorded in the third quarter of
    2002. On May 1, 2007, in connection with the sale of the
    Irving, Texas facility, we paid $6 million to terminate
    this contract, of which $2 million was reimbursed by the
    buyer of the facility. The remaining balance of $2 million
    is expected to be paid upon the commencement of volume
    manufacturing activity by the buyer in 2008.       46




---



##### Table of Contents



2006
    Restructuring Activities
      
    $7 million in one-time minimum statutory termination
    benefits recorded in accordance with SFAS No. 112.
    These costs related to the termination of employees in Europe.
    $2 million in one-time severance costs related to the
    involuntary termination of employees, primarily in
    manufacturing, research and development and administration.
    These benefits costs were recorded in accordance with
    SFAS No. 146.    2005
    Restructuring Activities
        Loss on
    Sale and Other Charges
  Nantes
    Fabrication Facility Sale
      
    $11 million associated with the loss on the sale of our
    Nantes fabrication facility, including the cost of transferring
    319 employees to the buyer.
    $2 million of building and improvements were removed from
    operations and written down to zero following relocation of
    certain manufacturing activities to Asia.  clean-up
 47




---



##### Table of Contents



Legal
    Awards and Settlements
    Interest
    and Other Expenses, Net
        Provision
    for Income Taxes
       48




---



##### Table of Contents



non-U.S. jurisdictions
            Stock-Based
    Compensation
     49




---



##### Table of Contents



Discontinued
    Operations
  Grenoble,
    France, Subsidiary Sale
              (In thousands)Proceeds, net of working capital adjustments

$
122,610Costs of disposition


(2,537
)Net proceeds from the sale


120,073Less:Book value of net assets disposed of


(14,866
)Cumulative translation adjustment effect


4,631Gain on sale of discontinued operations, before income taxes


109,838Provision for income taxes


(9,506
)Gain on sale of discontinued operations, net of income taxes

$
100,332  50




---



##### Table of Contents



Years EndedDecember 31,


December 31,2006


2005(In thousands, except per share data)Net revenues

$
79,871


$
114,608Operating costs and expenses


57,509



91,838Income from discontinued operations, before income taxes


22,362



22,770Gain on sale of discontinued operations, before income taxes


109,838



Income from and gain on sale of discontinued operations


132,200



22,770Less: provision for income taxes


(18,899
)


(6,494
)Income from and gain on sale of discontinued operations, net of
    income taxes

$
113,301


$
16,276Income from and gain on sale of discontinued operations, net of
    income taxes, per share:Basic and diluted

$
0.23


$
0.03Weighted-average shares used in basic and diluted income per
    share calculations


487,413



481,534   Liquidity
    and Capital Resources
    Form 10-K,
  Operating Activities:
 51




---



##### Table of Contents



work-in-process
        Investing Activities:
    Financing Activities:
   52




---



##### Table of Contents



3-year
  non-U.S. trade non-U.S. trade
 53




---



##### Table of Contents



Contractual
    Obligations
    Payments Due by PeriodContractual Obligations:

Up to 1 Year


2-3 Years


4-5 Years


After 5 Years


Total(In thousands)Notes payable

$
3,749


$



$



$
2,472


$
6,221Capital leases


13,722



11,967



5,969







31,658Line of credit


125,000















125,000Total debt obligations


142,471



11,967



5,969



2,472



162,879Capital purchase commitments


3,868















3,868Long-term supply agreement obligation(a)


15,746















15,746Long-term gas supply agreement(b)


1,752



3,696



3,946



9,021



18,415Pension plan


1,664



2,943



3,586



44,386



52,579Grants to be repaid


50,312















50,312Operating leases


23,256



19,849



12,695



1,805



57,605Other long-term obligations(c)


22,575



25,511



26,908



25,585



100,579Total other commitments


119,173



51,999



47,135



80,797



299,104Add: interest


4,192



3,864



1,311



169



9,536Total

$
265,836


$
67,830


$
54,415


$
83,438


$
471,519     (a)
    
    On December 6, 2005, we sold our Nantes, France fabrication
    facility, and the related foundry activities, to XbyBus SAS. The
    facility was owned by us since 1998 and was comprised of five
    buildings totaling 131,000 square feet, manufacturing
    BiCMOS, CMOS and non-volatile technologies. The facility
    employed a total of 603 persons, of which
    284 employees were retained by us and the remaining 319
    manufacturing employees were transferred to XbyBus SAS.
    Concurrent with the sale, we entered into a three-year supply
    agreement with a subsidiary of XbyBus SAS, whereby we are
    required to purchase a minimum volume of wafers through 2008.
    The supply agreement requires a minimum purchase of
    approximately $59 million, of which approximately
    $16 million is still required over the term of the
    agreement (see Note 17 of Notes to Consolidated Financial
    Statements for further discussion).(b)
    
    This amount relates to the contractual obligation on a supply
    agreement related to our North Tyneside, UK facility. We plan to
    terminate this arrangement in 2008 due to the announced sale of
    our North Tyneside facility. Our estimated liability upon early
    termination of this arrangement is $11 million.(c)
    
    Other long-term obligations consist principally of future
    repayments of approximately $65 million of advances from
    customers, $16 million of technology license payments (at
    present value), and $9 million of cash awards due under
    executive retention agreements, and $10 million of other
    long-term commitments. Long-term advances from customers
    includes approximately $10 million that is due within
    1 year, and has been classified within current liabilities
    (see Note 2 of Notes to Consolidated Financial Statements
    for further discussion). The balance is due in annual
    installments of $10 million per year, until repaid in full.
    We have agreements with certain employees providing for cash
    bonuses. As of December 31, 2007, we have a commitment for
    future payments of $9 million in bonus and related payroll
    taxes under these agreements.(d)
    
    The contractual obligation table excludes our FIN 48
    liabilities of $98 million because we cannot make a
    reliable estimate of the timing of cash payments. See
    Note 11 of the Notes to the Consolidated Financial
    Statements for further discussion. 54




---



##### Table of Contents



Defined
    Benefit Pension Plans
    Off-Balance
    Sheet Arrangements (Including Guarantees)
   55




---



##### Table of Contents



Recent
    Accounting Pronouncements
          Critical
    Accounting Policies and Estimates
   56




---



##### Table of Contents



Revenue
    Recognition
      non-U.S. based
    Allowance
    for Doubtful Accounts and Sales Returns
        Accounting
    for Income Taxes
     57




---



##### Table of Contents



Valuation
    of Inventory
  first-in,
      Fixed
    Assets
  and/or
   58




---



##### Table of Contents



Stock-Based
    Compensation
    No. FAS 123R-3
       59




---



##### Table of Contents



Restructuring
    Charges
    Litigation
    Valuation
    of Marketable Securities
    ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Interest
    Rate Risk
     60




---



##### Table of Contents



TotalVariable-rateDebtOutstanding atPayments by Due Year


December 31,2008


2009


2010


2011


2012


Thereafter


2007(In thousands)60 day USD LIBOR weighted-average interest rate
    basis(1)  Revolving line of credit

$
100,000


$



$



$



$



$



$
100,000Total of 60 day USD LIBOR rate debt

$
100,000


$



$



$



$



$



$
100,00090 day USD LIBOR weighted-average interest rate
    basis(1)  Revolving line of credit due 2008

$
25,000


$



$



$



$



$



$
25,000Total of 90 day USD LIBOR rate debt

$
25,000


$



$



$



$



$



$
25,00090 day EURIBOR weighted-average interest rate
    basis(1)  Capital leases

$
9,957


$
4,707


$
4,707


$
4,707


$
1,178


$



$
25,256Total of 90 day USD LIBOR rate debt

$
9,957


$
4,707


$
$4,707


$
4,707


$
1,178


$



$
25,256360 day USD LIBOR weighted-average interest rate
    basis(1)  Senior secured term loan due 2008

$
3,749


$



$



$



$



$



$
3,749Total of 360 day USD LIBOR rate debt

$
3,749


$



$



$



$



$



$
3,749Total variable-rate debt

$
138,706


$
4,707


$
4,707


$
4,707


$
1,178


$



$
154,005     (1)
    
    Actual interest rates include a spread over the basis amount.      Interest ExpenseInterest Expense Given an Interest


with No Change in


Interest Expense Given an InterestRate Decrease by X Basis Points


Interest Rate


Rate Increase by X Basis Points150 BPS


100 BPS


50 BPS





50 BPS


100 BPS


150 BPS(In thousands)Interest expense

$
11,138


$
11,542


$
11,946


$
12,351


$
12,754


$
13,158


$
13,562   Foreign
    Currency Risk
   61




---



##### Table of Contents



Liquidity
    and Valuation Risk
  Form 10-K,
 62




---



##### 



ITEM 8.
    CONSOLIDATED
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageConsolidated Financial Statements of Atmel CorporationConsolidated Statements of Operations for the
    Years Ended December 31, 2007, 2006 and 2005


64Consolidated Balance Sheets as of
    December 31, 2007 and 2006


65Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2007, 2006 and 2005


66Consolidated Statements of Stockholders
    Equity and Comprehensive Income (Loss) for the Years Ended
    December 31, 2007, 2006 and 2005


67Notes to Consolidated Financial Statements


68Report of Independent Registered Public
    Accounting Firm


114Financial Statement SchedulesThe following Financial Statement Schedules for the years ended
    December 31, 2007, 2006 and 2005 should be read in
    conjunction with the Consolidated Financial Statements, and
    related notes theretoSchedule II Valuation and Qualifying
    Accounts


115Schedules not listed above have been omitted because they are
    not applicable or are not required or the information required
    to be set forth therein is included in the Consolidated
    Financial Statements or notes thereto.Supplementary Financial DataSelected Quarterly Financial Data (unaudited) for
    the Years Ended December 31, 2007 and 2006


116   63




---



##### Table of Contents



Atmel
    Corporation
  Consolidated
    Statements of Operations
  Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(in thousands, except per share data)Net revenues

$
1,639,237


$
1,670,887


$
1,561,107Operating expensesCost of revenues


1,059,006



1,108,769



1,165,338Research and development


272,041



289,108



268,164Selling, general and administrative


242,811



213,641



184,876Charges for grant repayments


1,464



30,034



Asset impairment charges (recovery)


(1,057
)


82,582



12,757Restructuring charges


13,239



8,729



4,483Loss on sale and other charges










13,199Total operating expenses


1,587,504



1,732,863



1,648,817Income (loss) from operations


51,733



(61,976
)


(87,710
)Legal awards and settlements










44,369Interest and other income (expenses), net


3,976



(11,726
)


(19,349
)Income (loss) from continuing operations before income
    taxes


55,709



(73,702
)


(62,690
)Benefit from (provision for) income taxes


(7,824
)


(24,949
)


13,063Income (loss) from continuing operations


47,885



(98,651
)


(49,627
)Income from discontinued operations, net of provision for income
    taxes of $9,393 in 2006 and $6,494 in 2005






12,969



16,276Gain on sale of discontinued operations, net of provision for
    income taxes of $9,506






100,332



Net income (loss)

$
47,885


$
14,650


$
(33,351
)Basic net income (loss) per share:Income (loss) from continuing operations

$
0.10


$
(0.20
)

$
(0.10
)Income from discontinued operations, net of provision for income
    taxes






0.02



0.03Gain on sale of discontinued operations, net of provision for
    income taxes






0.21



Net income (loss)

$
0.10


$
0.03


$
(0.07
)Weighted-average shares used in basic net income (loss) per
    share calculations


477,213



487,413



481,534Diluted net income (loss) per share:Income (loss) from continuing operations

$
0.10


$
(0.20
)

$
(0.10
)Income from discontinued operations, net of provision for income
    taxes






0.02



0.03Gain on sale of discontinued operations, net of provision for
    income taxes






0.21



Net income (loss)

$
0.10


$
0.03


$
(0.07
)Weighted-average shares used in diluted net income (loss) per
    share calculations


481,737



487,413



481,534    64




---



##### Table of Contents



Atmel
    Corporation
  Consolidated
    Balance Sheets
  December 31,


December 31,2007


2006(In thousands, except par value)ASSETSCurrent assetsCash and cash equivalents

$
374,130


$
410,480Short-term investments


55,817



56,264Accounts receivable, net of allowance for doubtful accounts of
    $3,111 and $3,605, respectively


209,189



227,031Inventories


357,301



339,799Prepaid and other current assets


88,781



118,965Total current assets


1,085,218



1,152,539Fixed assets, net


579,566



602,290Non-current assets held for sale






35,040Intangible and other assets, net


37,969



28,670Total assets

$
1,702,753


$
1,818,539LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt

$
142,471


$
108,651Trade accounts payable


191,856



162,408Accrued and other liabilities


266,987



277,461Deferred income on shipments to distributors


19,708



18,856Total current liabilities


621,022



567,376Long-term debt less current portion


20,408



60,333Other long-term liabilities


237,844



236,936Total liabilities


879,274



864,645Commitments and contingencies (Note 10)Stockholders equityCommon stock; par value $0.001; Authorized:
    1,600,000 shares;Shares issued and outstanding: 443,837 at December 31, 2007
    and 488,844 at December 31, 2006


444



489Additional paid-in capital


1,193,846



1,418,004Accumulated other comprehensive income


153,140



107,237Accumulated deficit


(523,951
)


(571,836
)Total stockholders equity


823,479



953,894Total liabilities and stockholders equity

$
1,702,753


$
1,818,539    65




---



##### Table of Contents



Atmel
    Corporation
  Consolidated
    Statements of Cash Flows
  Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(In thousands)Cash flows from operating activitiesNet income (loss)

$
47,885


$
14,650


$
(33,351
)Adjustments to reconcile net income (loss) to net cashprovided by operating activitiesDepreciation and amortization


128,773



225,006



290,748Gain on sale of discontinued operations






(109,838
)


Loss (gain) on sale or disposal of fixed assets and other charges


(1,102
)


(2,624
)


1,663Asset impairment charges (recovery)


(1,057
)


82,582



12,757Deferred taxes


6,392



6,121



2,691Other non-cash losses (gains)


404



8,726



(4,120
)Provision for (recovery of) doubtful accounts receivable


(212
)


106



(5,575
)Accretion of interest on long-term debt


912



4,699



12,308Stock-based compensation expense


16,652



9,118



1,850Changes in operating assets and liabilitiesAccounts receivable


17,719



8,054



1,737Inventories


(14,682
)


(48,848
)


25,984Current and other assets


32,641



(27,608
)


(15,922
)Trade accounts payable


15,689



26,440



(61,538
)Accrued and other liabilities


(46,728
)


82,855



(2,249
)Income taxes payable


(8,261
)


16,526



(24,131
)Deferred income on shipments to distributors


852



520



(2,779
)Net cash provided by operating activities


195,877



296,485



200,073Cash flows from investing activitiesAcquisitions of fixed assets


(69,730
)


(83,330
)


(169,126
)Proceeds from the sale of fixed assets and other assets


3,000



4,466



2,238Proceeds from sale of discontinued operations, net






120,073



Proceeds from the sale of manufacturing facilities and related
    assets, net of selling costs


34,714







Proceeds from the sale of interest in privately held companies
    and other






1,799



6,746Acquisitions of intangible assets


(900
)


(549
)


(7,821
)Purchases of short-term investments


(12,865
)


(22,290
)


(16,110
)Sales or maturities of short-term investments


14,420



15,535



26,790Net cash provided by (used in) investing activities


(31,361
)


35,704



(157,283
)Cash flows from financing activitiesPrincipal payments on capital leases and other debt


(108,840
)


(122,032
)


(139,308
)Proceeds from capital leases and other debt


100,000



25,000



146,242Repurchase of convertible notes






(145,515
)


(80,846
)Repurchase of common stock


(250,151
)






Proceeds from issuance of common stock


9,160



11,206



11,901Proceeds from financing related to sale of manufacturing
    facilities


42,951







Net cash used in financing activities


(206,880
)


(231,341
)


(62,011
)Effect of exchange rate changes on cash and cash equivalents


6,014



9,309



(26,806
)Net increase (decrease) in cash and cash equivalents


(36,350
)


110,157



(46,027
)Cash and cash equivalents at beginning of the year


410,480



300,323



346,350Cash and cash equivalents at end of year

$
374,130


$
410,480


$
300,323Supplemental cash flow disclosures:Interest paid

$
8,176


$
14,080


$
15,434Income taxes paid, net


15,219



15,077



11,851Supplemental non-cash investing and financing activities
    disclosures:Increases (decreases) in accounts payable related to fixed asset
    purchases


(9,544
)


5,616



(75,748
)Increases in liabilities related to intangible assets purchases


17,778







Fixed assets acquired under capital leases






3,925



112,815    66




---



##### Table of Contents



Atmel
    Corporation
   CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY

AND COMPREHENSIVE INCOME (LOSS) AccumulatedCommon Stock


Additional


Unearned


OtherPar


Paid-In


Stock-Based


Comprehensive


AccumulatedShares


Value


Capital


Compensation


Income


Deficit


Total(In thousands)Balances, December 31, 2004


477,926


$
478


$
1,388,651


$
(5,078
)

$
276,652


$
(553,135
)

$
1,107,568Comprehensive loss:Net loss






















(33,351
)


(33,351
)Actuarial loss related to defined benefit pension plans


















(2,647
)






(2,647
)Realization of gains on derivative instruments, net of tax


















(3,918
)






(3,918
)Unrealized gains on investments, net of tax


















335







335Foreign currency translation adjustments


















(144,367
)






(144,367
)Total comprehensive loss


























(183,948
)Amortization of unearned stock-based compensation














1,779











1,779Non-employee stock-based compensation










543















543Credit to stock compensation due to variable accounting










(472
)














(472
)Reversal of unearned stock-based compensation expense due to
    employee termination










(357
)


357











Exercise of stock options


1,758



3



3,507















3,510Issuance of common stock under employee stock purchase plan


3,682



2



8,389















8,391Balances, December 31, 2005


483,366



483



1,400,261



(2,942
)


126,055



(586,486
)


937,371Comprehensive loss:Net income






















14,650



14,650Actuarial gain related to defined benefit pension plans


















561







561Unrealized gains on investments, net of tax


















1,315







1,315Foreign currency translation adjustments


















80,631







80,631Foreign currency translation gains credited to asset impairment
    charges (See Note 15)


















(97,725
)






(97,725
)Total comprehensive loss


























(568
)Cumulative effect adjustment on adoption of
    SFAS No. 158, net of income taxes


















(3,600
)






(3,600
)Stock-based compensation expense










9,485















9,485Exercise of stock options


3,406



4



7,382















7,386Issuance of common stock under employee stock purchase plan


2,072



2



3,818















3,820Elimination of unearned stock-based compensation upon adoption
    of SFAS No. 123R










(2,942
)


2,942











Balances, December 31, 2006


488,844



489



1,418,004







107,237



(571,836
)


953,894Comprehensive income:Net income






















47,885



47,885Actuarial gain related to defined benefit pension plans


















6,861







6,861Unrealized gains on investments, net of tax


















681







681Foreign currency translation adjustments


















38,361







38,361Total comprehensive income


























93,788Stock-based compensation expense










16,788















16,788Exercise of stock options


3,604



4



9,156















9,160Vested restricted stock units


312























Repurchase of common stock


(48,923
)


(49
)


(250,102
)














(250,151
)Balances, December 31, 2007


443,837


$
444


$
1,193,846


$



$
153,140


$
(523,951
)

$
823,479    67




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (In thousands, except per share data, employee data, and
    where otherwise indicated)
  Note 1
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Nature of
    Operations
  non-U.S. original
    Principles
    of Consolidation
    Reclassifications
    Use of
    Estimates
   68




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fair
    Value of Financial Instruments
  and/or
  Cash and
    Cash Equivalents
      Short-Term
    Investments
  available-for-sale. Available-for-sale available-for-sale
  Form 10-K,
 69




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounts
    Receivable
    Inventories
  first-in,
  Fixed
    Assets
    Building and improvements

10 to 20 yearsMachinery, equipment and software

2 to 5 yearsFurniture and fixtures

5 years     Investments
    in Privately-Held Companies
    other-than-temporary.
  Revenue
    Recognition
     70




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  non-U.S. based
  Royalty
    Expense Recognition
    Grant
    Recognition
    Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(In thousands)Cost of revenues

$
1,685


$
9,654


$
11,109Research and development expenses


18,038



14,573



25,538Total

$
19,723


$
24,227


$
36,647     Advertising
    Costs
   71




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Foreign
    Currency Translation
    Stock-Based
    Compensation
             72




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Certain
    Risks and Concentrations
    period-to-period
    Income
    Taxes
  non-U.S. subsidiaries,
   73




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Long-Lived
    Assets
      Derivative
    Instruments
           74




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Balance
    Sheet Hedges
    Cash Flow
    Hedges
    Net
    Income (Loss) Per Share
    Product
    Warranties
    Research
    and Development and Software Development Costs
   75




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Recent
    Accounting Pronouncements
          Note 2
    BALANCE
    SHEET DETAIL    December 31,


December 31,2007


2006(In thousands)Raw materials and purchased parts

$
22,996


$
13,434Work-in-progress


249,863



245,760Finished goods


84,442



80,605$
357,301


$
339,799  76




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,


December 31,2007


2006(In thousands)Value-added tax receivable

$
35,667


$
50,235Deferred income tax assets


5,726



5,271Grants receivable


5,463



6,540Income tax receivable


3,593



2,187Prepaid income taxes


7,274



7,739Others


31,058



46,993$
88,781


$
118,965     December 31,


December 31,2007


2006(In thousands)Intangible assets, net

$
19,552


$
6,024Investment in privately-held companies


7,978



6,122Deferred income tax assets, net of current portion


5,006



7,965Others


5,433



8,559$
37,969


$
28,670     December 31,


December 31,2007


2006(In thousands)Advance payments from customers

$
10,120


$
10,000Income taxes payable


10,788



24,447Deferred income tax liability, current portion


2,783



569Value-added tax payable


1,973



10,738Accrued salaries and benefits


91,972



74,079Deferred grants


12,968



6,461Grants to be repaid(1)


10,793



47,647Warranty accruals and accrued returns, royalties and licenses


21,573



19,223Accrued restructuring


15,675



8,511Financing liability related to sale of manufacturing
    facilities(2)


44,137



Others


44,205



75,786$
266,987


$
277,461     (1)
    
    Excludes $39,519 of grants to be repaid in accounts payable at
    December 31, 2007, which have been reclassified to accounts
    payable.(2)
    
    See Note 15 for further discussion. 77




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     December 31,


December 31,2007


2006(In thousands)Advance payments from customers

$
54,668


$
64,668Income taxes payable


98,269



92,009Accrued pension liability


50,915



51,970Long-term technology license payable


16,107



3,808Accrued restructuring






7,875Deferred income tax liability, non-current portion


4,891



3,682Others


12,994



12,924$
237,844


$
236,936         Note 3
    SHORT-TERM
    INVESTMENTS    available-for-sale
 78




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,


December 31,2007


2006Book Value


Market Value


Book Value


Market Value(In thousands)U.S. Government debt securities

$



$



$
1,400


$
1,396State and municipal debt securities


3,450



3,450



3,450



3,450Corporate equity securities


87



1,542



87



892Corporate debt securities and other obligations


49,442



50,825



49,170



50,526$
52,979


$
55,817


$
54,107


$
56,264Unrealized gains


2,900







2,176



Unrealized losses


(62
)






(19
)


Net unrealized gains


2,838







2,157



Total

$
55,817


$
55,817


$
56,264


$
56,264     available-for-sale
  (In thousands)Due within one year

$
11,606Due in 1-5 years


4,211Due in 5-10 years


Due after 10 years


37,075Total

$
52,892     Note 4
    FIXED
    ASSETS  December 31,


December 31,2007


2006(In thousands)Land

$
38,568


$
58,539Buildings and improvements


681,581



687,505Machinery and equipment


1,799,765



1,642,177Furniture and fixtures


164,005



158,034Construction-in-progress


2,767



10,658$
2,686,686


$
2,556,913Less: Accumulated depreciation and amortization


(2,107,120
)


(1,954,623
)$
579,566


$
602,290  79




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Note 5
    INTANGIBLE
    ASSETS    December 31


December 31,2007


2006(In thousands)Core/licensed technology

$
102,906


$
89,581Accumulated amortization


(83,354
)


(83,557
)Total

$
19,552


$
6,024     Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(In thousands)Core/licensed technology

$
4,709


$
6,050


$
11,818Non-compete agreement










142Patents






409



459Total amortization expense on intangible assets

$
4,709


$
6,459


$
12,419  80




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ending December 31:(In thousands)2008

$
4,2892009


4,1712010


3,8452011


3,2212012


3,221Thereafter


805Total future amortization

$
19,552   Note 6
    BORROWING
    ARRANGEMENTS    December 31,


December 31,2007


2006(In thousands)Various interest-bearing notes and term loans

$
6,221


$
80,550Bank lines of credit


125,000



25,000Capital lease obligations


31,658



63,434Total

$
162,879


$
168,984Less: current portion of long-term debt and capital lease
    obligation


(142,471
)


(108,651
)Long-term debt and capital lease obligations due after one year

$
20,408


$
60,333     Years Ending December 31:(In thousands)2008

$
146,4702009


7,1972010


6,0012011


4,9982012


1,191Thereafter


2,472168,329Less: amount representing interest


(5,450
)Total

$
162,879    81




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3-year
  non-U.S. trade non-U.S. trade
  90-day
       82




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Note 7
    STOCK-BASED
    COMPENSATION  Option
    and Employee Stock Purchase Plans
      OutstandingOptions


Weighted-Exercise


AverageAvailable


Number of


Price


Exercise Pricefor Grant


Options


per Share


per Share(In thousands, except per share data)Balances, December 31, 2004


21,506



29,457


$
1.00-$24.44


$
5.68Options granted


(5,172
)


5,172



2.06-3.29



3.03Options cancelled/expired/forfeited


1,531



(2,645
)


1.68-21.47



5.68Options exercised






(1,758
)


1.68-2.62



2.00Balances, December 31, 2005


17,865



30,226


$
1.00-$24.44


$
5.44Options granted


(9,559
)


9,559


$
3.68-$6.28



5.65Options cancelled/expired/forfeited


4,994



(5,059
)

$
1.00-$24.44



5.87Options exercised






(3,406
)

$
1.68-$5.13



2.17Balances, December 31, 2006


13,300



31,320


$
1.68-$24.44


$
5.79Restricted stock units granted


(4,130
)










Options granted


(7,195
)


7,195


$
4.35-$6.05



4.99Options cancelled/expired/forfeited


4,129



(4,129
)

$
1.68-$24.44



7.24Options exercised






(3,604
)

$
1.68-$5.75



2.54Balances, December 31, 2007


6,104



30,782


$
1.68-$24.44


$
5.81     83




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Weighted AverageNumber of


Grant Date FairShares


Value Per Share(In thousands, except per share data)Restricted stock units


4,130


$
5.29         Options Outstanding


Options ExercisableWeighted-Average











Weighted-Remaining


Weighted-








Average


Weighted-Range of




Contractual


Average


Aggregate





Remaining


Average


AggregateExercise

Number


Term


Exercise


Intrinsic


Number


Contractual


Exercise


IntrinsicPrice

Outstanding


(years)


Price


Value


Exercisable


Term (years)


Price


Value(In thousands, except for price and life data)1.68  2.11


3,246



4.23


$
2.07


$
7,304



3,109



4.13


$
2.08


$
6,9652.13  3.67


3,349



6.55



3.11



4,052



1,772



5.96



3.11



2,1443.68  4.70


879



7.45



4.23



27



366



6.03



4.16



284.74  4.74


3,354



9.59



4.74







247



9.62



4.74



4.77  4.92


3,406



9.12



4.90







610



8.64



4.89



4.95  5.73


4,372



8.63



5.47







1,061



7.83



5.41



5.75  6.05


3,153



5.75



5.81







2,180



5.74



5.79



6.12  6.27


112



6.69



6.22







90



6.14



6.25



6.28  6.28


3,498



8.90



6.28







757



8.96



6.28



6.47  24.44


5,413



3.25



11.20







5,376



3.26



11.22



30,782



6.85


$
5.81


$
11,383



15,568



7.38


$
6.53


$
9,137    84




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Prior
    Period Pro Forma Presentation
    Year EndedDecember 31,2005(In thousands, exceptper share data)Net loss  as reported

$
(33,351
)Add: Employee stock-based compensation expenseincluded in net loss as reported, net of tax


1,307Deduct: Employee stock-based compensation expensebased on fair value, net of tax


(16,614
)Net loss  pro forma

$
(48,658
)Net loss per share  basic and dilutedAs reported

$
(0.07
)Pro forma

$
(0.10
)Weighted-average shares used in basic and diluted per share
    calculations


481,534     Years EndedDecember 31,


December 31,


December 31,2007


2006


2005Risk-free interest rate


4.26
%


4.70
%


3.86
%Expected life (years)


5.68



5.57



5.16Expected volatility


59
%


68
%


92
%Expected dividend yield










            85




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Employee
    Stock Purchase Plan
      Years EndedDecember 31,


December 31,2007


2005Risk-free interest rate


4.09
%


3.54
%Expected life (years)


0.50



0.50Expected volatility


34
%


66
%Expected dividend yield






       Years EndedDecember 31,


December 31,2007


2006(In thousands)Employee stock options

$
12,844


$
9,063Employee stock purchase plan


613



302Non-employee stock option modifications






120Restricted stock units


3,331



Amounts capitalized in inventory


(136
)


(367
)$
16,652


$
9,118    86




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(In thousands)Cost of revenues

$
1,966


$
2,084



272Research and development


4,601



2,102



373Selling, general and administrative


10,085



4,932



1,205Total stock-based compensation expense, before income taxes


16,652



9,118



1,850Tax benefit










Total stock-based compensation expense, net of income taxes

$
16,652


$
9,118



1,850           Tender
    Offer
      Note 8
    STOCKHOLDER
    RIGHTS PLAN   87




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 9
    ACCUMULATED
    OTHER COMPREHENSIVE INCOME      December 31,


December 31,2007


2006(In thousands)Foreign currency translation adjustments

$
149,127


$
110,766Actuarial gains (losses) related to defined benefit pension plans


1,175



(5,686
)Net unrealized gains on investments


2,838



2,157Total accumulated other comprehensive income

$
153,140


$
107,237     Note 10
    COMMITMENTS
    AND CONTINGENCIES  Commitments
  Leases
     88




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Operating


CapitalYears Ending December 31:

Leases, Net


Leases(In thousands)2008

$
23,256


$
14,9092009


10,707



7,1972010


9,142



6,0012011


7,033



4,9982012


5,662



1,191Thereafter


1,805



$
57,605



34,296Less: amount representing interest






(2,638
)Total capital lease and other long term obligations






31,658Less: current portion






(13,722
)Capital lease and other long term obligations due after one year





$
17,936   Employment
    Agreements
      Indemnifications
     89




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Purchase
    Commitments
    Years Ending December 31:

(In thousands)2008

$
1,7522009


1,8132010


1,8822011


1,9432012


2,003Thereafter


9,021$
18,414     Contingencies
  Litigation
     90




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
               91




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Other
    Contingencies
    Income
    Tax Contingencies
     92




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Product
    Warranties
      Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(In thousands)Balance at beginning of period

$
4,773


$
6,184


$
7,514Accrual for warranties during the period, net of change in
    estimates


8,919



4,223



4,007Actual costs incurred


(6,903
)


(5,634
)


(5,337
)Balance at end of period

$
6,789


$
4,773


$
6,184   Guarantees
   93




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 11
    INCOME
    TAXES    Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(In thousands)U.S.

$
(149,491
)

$
(106,758
)

$
(138,183
)Foreign


205,200



33,056



75,493Income (loss) from continuing operations before income taxes

$
55,709


$
(73,702
)

$
(62,690
)     Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(In thousands)Federal


Current


$
7,042


$
5,871


$
4,184Deferred



574



350



1,407State


Current



29



28



Deferred











Foreign


Current



(2,286
)


12,929



(19,938
)Deferred



2,465



5,771



1,284Provision for (benefit from) income taxes





$
7,824


$
24,949


$
(13,063
)  94




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,


December 31,2007


2006(In thousands)Deferred income tax assets:Fixed assets

$
130,559


$
178,731Intangible assets


8,136



4,362Unrealized foreign exchange translation losses


26,589



22,307Deferred income on shipments to distributors


21,184



9,831Stock-based compensation


11,257



13,210Accrued liabilities


32,624



42,860Net operating losses


234,284



299,028Research and development and other tax credits


55,932



68,145Other


780



Total deferred income tax assets


521,345



638,474Deferred income tax liabilities:Other






(485
)Total deferred income tax liabilities






(485
)Less valuation allowance


(518,287
)


(629,004
)Net deferred income tax assets

$
3,058


$
8,985   non-U.S. subsidiaries,
 95




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years EndedDecember 31,


December 31,


December 31,2007


2006


2005U.S. Federal statutory income tax rate


35.00
%


(35.00
)%


(35.00
)%Difference between U.S. and foreign tax rates


(45.46
)


(15.87
)


3.14Recognition of tax credits


(46.59
)


(5.32
)


(3.59
)Net operating loss and future deductions not currently benefited


40.95



79.57



46.44Provision for tax settlements and withholding taxes


26.10



9.38



8.35Release of income taxes previously accrued










(39.21
)Other


4.04



1.09



(0.97
)Effective tax provision (benefit) rate


14.04
%


33.85
%


(20.84
)%         non-U.S. jurisdictions
   96




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Totals(In thousands)Balance at January 1, 2007

$
176,309Tax Positions Related to Current Year:Additions


13,141Tax Positions Related to Prior Year:Reductions


(21,017
)Settlements


(2,253
)Balance at December 31, 2007

$
166,180               and/or and/or
 97




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 12
    PENSION
    PLANS      ,
  Pre SFAS No.





Post SFAS No.158 Adoption


Adjustments


158 AdoptionDeferred tax assets, long-term

$
7,716


$
249


$
7,965Total assets

$
1,818,290


$
249


$
1,818,539Accrued pension liabilities, current

$
477


$
653


$
1,130Accrued pension liabilities, long-term

$
48,843


$
3,127


$
51,970Deferred tax liability, long-term

$
416


$
69


$
485Accumulated other comprehensive income

$
110,837


$
(3,600
)

$
107,237Total liabilities and stockholders equity

$
1,818,290


$
249


$
1,818,539     Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(In thousands)Service costs-benefits earned during the period

$
2,622


$
3,013


$
2,380Interest cost on projected benefit obligation


2,530



2,318



2,096Amortization of actuarial loss


123



589



115Net pension cost

$
5,275


$
5,920


$
4,591Distribution of pension costs:Continuing operations

$
5,275


$
5,597


$
4,088Discontinued operations






323



503Net pension cost

$
5,275


$
5,920


$
4,591  98




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,


December 31,2007


2006(In thousands)Projected benefit of obligation at beginning of the year

$
52,945


$
52,993Service cost


2,622



2,831Interest cost


2,530



2,189Actuarial gains


(10,223
)


(5,923
)Benefits paid


(716
)


(564
)Foreign currency exchange rate changes


5,421



1,419Projected benefit obligation at end of the year

$
52,579


$
52,945Accumulated benefit obligation at end of the year

$
44,884


$
47,808       Years EndedDecember 31,


December 31,


December 31,2007


2006


2005Assumed discount rate


5.5-5.7
%


4.6
%


4.0-4.3
%Assumed compensation rate of increase


2.0-4.0
%


2.0-4.0
%


2.0-4.0
%       Years Ending December 31:(In thousands)2008

$
1,6642009


1,4812010


1,4622011


1,8792012


1,7072013 through 2017


12,950$
21,143    99




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        December 31,


December 31,2007


2006(In thousands)Net actuarial loss (gain)

$
(1,180
)

$
5,680Prior service cost


5



6$
(1,175
)

$
5,686     Executive
    Deferred Compensation Plan
  No. 97-14, No. 97-14). No. 97-14,
    401(k)
    Tax Deferred Savings Plan
    Note 13
    OPERATING
    AND GEOGRAPHICAL SEGMENTS   100




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    
    Application specific integrated circuit (ASIC)segment includes custom application specific integrated
    circuits designed to meet specialized single-customer
    requirements for their high performance devices in a broad
    variety of applications. This segment also encompasses a range
    of products which provide security for digital data, including
    smart cards for mobile phones, set top boxes, banking and
    national identity cards. The Company also develops customer
    specific ASICs, some of which have military applications. This
    segment also includes products with military and aerospace
    applications.
    Microcontrollerssegment includes a variety of
    proprietary and standard microcontrollers, the majority of which
    contain embedded nonvolatile memory and integrated analog
    peripherals. This segment also includes products with military
    and aerospace applications.
    Nonvolatile Memoriessegment consists predominantly of
    serial interface electrically erasable programmable read-only
    memory (SEEPROM) and serial interface Flash memory
    products. This segment also includes parallel interface Flash
    memories as well as mature parallel interface EEPROM and EPROM
    devices. This segment also includes products with military and
    aerospace applications.
    Radio Frequency (RF) and Automotivesegment
    includes products designed for the automotive industry. This
    segment produces and sells wireless and wired devices for
    industrial, consumer and automotive applications and it also
    provides foundry services which produce radio frequency products
    for the mobile telecommunications market.     101




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Information
    about Reportable Segments
 Micro-


Nonvolatile


RF andASIC


Controllers


Memories


Automotive


Total(In thousands)Year ended December 31, 2007Net revenues from external customers

$
495,815


$
458,228


$
376,675


$
308,519


$
1,639,237Segment income (loss) from operations


(21,132
)


27,718



40,015



18,778



65,379Year ended December 31, 2006Net revenues from external customers

$
501,698


$
408,394


$
375,319


$
385,476


$
1,670,887Segment income (loss) from operations


(51,476
)


59,008



32,062



19,775



59,369Year ended December 31, 2005Net revenues from external customers

$
534,223


$
276,771


$
393,055


$
357,058


$
1,561,107Segment income (loss) from operations


(90,638
)


40,210



(10,896
)


4,053



(57,271
)     Reconciliation
    of Segment Information to Consolidated Statements of
    Operations
  Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(In thousands)Total segment income (loss) from operations

$
65,379


$
59,369


$
(57,271
)Unallocated amounts:Charges for grant repayments


(1,464
)


(30,034
)


Asset impairment recovery (charges)


1,057



(82,582
)


(12,757
)Restructuring charges


(13,239
)


(8,729
)


(4,483
)Loss on sale and other charges










(13,199
)Consolidated income (loss) from operations

$
51,733


$
(61,976
)

$
(87,710
)  102




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(In thousands)United States

$
219,541


$
241,379


$
210,399Germany


227,311



192,278



144,893France


154,866



168,047



138,960United Kingdom


33,844



29,042



24,594Japan


90,767



57,576



49,671China, including Hong Kong


375,544



352,437



356,868Singapore


153,102



257,312



271,616Rest of Asia-Pacific


208,005



206,901



198,709Rest of Europe


155,455



151,887



147,103Rest of the World


20,802



14,028



18,294Total net revenues

$
1,639,237


$
1,670,887


$
1,561,107     December 31,


December 31,2007


2006(In thousands)United States

$
137,334


$
159,998Germany


34,337



30,733France


268,358



285,469United Kingdom


106,651



108,510Asia-Pacific


28,541



19,915Rest of Europe


17,756



12,095Total

$
592,977


$
616,720         Note 14
    CHARGES
    FOR GRANT REPAYMENTS   103




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    ResearchYears Ended


Cost of


and DevelopmentDecember 31,


Revenues


Expenses


Total(In thousands)2006


$
6,607


$
302


$
6,9092005



6,483



940



7,4232004



4,181



409



4,5902003







2,143



2,1432002







2,086



2,0862001







543



543$
17,271


$
6,423


$
23,694     Years EndedDecember 31,


December 31,2007


2006(In thousands)Grant benefits previously recognized

$



$
23,694Accrued interest


1,464



1,908Impact of foreign exchange






4,432Total charges for grant repayments

$
1,464


$
30,034     Note 15
    ASSET
    IMPAIRMENT CHARGES (RECOVERY)    North
    Tyneside, United Kingdom, and Heilbronn, Germany,
    Facilities
   104




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  held-for-sale
       105




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Irving,
    Texas, Facility
          Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(In thousands)North Tyneside, United Kingdom

$
(1,057
)

$
72,277


$
Irving, Texas






10,305



3,980Colorado Springs, Colorado










8,777Total asset impairment charges (recovery)

$
(1,057
)

$
82,582


$
12,757   Note 16
    RESTRUCTURING
    CHARGES    January 1,








Currency


December 31,2007


Charges/





Translation


2007Accrual


(Credits)


Payments


Adjustment


Accrual(In thousands)Third quarter of 2002Termination of contract with supplier

$
8,896


$
(3,071
)

$
(4,233
)

$



$
1,592Fourth quarter of 2006Employee termination costs


7,490



3,305



(9,959
)


488



1,324Fourth quarter of 2007Employee termination costs






12,441







318



12,759Other exit related costs






564



(564
)






Total 2007 activity

$
16,386


$
13,239


$
(14,756
)

$
806


$
15,675
(1)     (1)
    
    $15,675 is recorded in accrued and other liabilities, which is
    expected to be paid prior to December 31, 2008.  106




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  January 1,








December 31,2006








2006Accrual


Charges


Payments


Accrual(In thousands)Third quarter of 2002Termination of contract with supplier

$
9,833


$



$
(937
)

$
8,896Third quarter of 2005Employee termination costs


1,246







(1,246
)


Fourth quarter of 2005Employee termination costs


1,223







(1,223
)


First quarter of 2006Employee termination costs






151



(151
)


Fourth quarter of 2006Employee termination costs






8,578



(1,088
)


7,490Total 2006 activity

$
12,302


$
8,729


$
(4,645
)

$
16,386
(2)     (2)
    
    $8,511 is recorded in accrued and other liabilities and $7,875
    is recorded in other long-term liabilities.  January 1,








December 31,2005








2005Accrual


Charges


Payments


Accrual(In thousands)Third quarter of 2002Termination of contract with supplier

$
10,919


$



$
(1,086
)

$
9,833Third quarter of 2005Employee termination costs






2,452



(1,206
)


1,246Fourth quarter of 2005Employee termination costs






2,031



(808
)


1,223Total 2005 activity

$
10,919


$
4,483


$
(3,100
)

$
12,302   2007
    Restructuring Activities
      
    Charges of $11,084 related to one-time severance costs for
    involuntary termination of employees. These employee severance
    costs were recorded in accordance with SFAS No. 146,
    Accounting for Costs Associated with Exit or Disposal
    Activities (SFAS No. 146).
    Charges of $1,357 related to on-going severance costs for
    involuntary termination of employees. These employee severance
    costs were recorded in accordance with SFAS No. 112,
    Employers Accounting for Post Employment
    Benefits  an amendment of FASB Statements No. 5
    and 43 (SFAS No. 112).
    Charges of $564 related to other exit related costs, which were
    recorded in accordance with SFAS No. 146. 107




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     
    Charges of $2,050 related to severance costs for involuntary
    termination of employees. These employee severance costs were
    recorded in accordance with SFAS No. 146.
    Charges of $1,255 related to one-time minimum statutory
    termination benefits, including changes in estimates, recorded
    in accordance with SFAS No. 112.
    A credit of $3,071 related to the settlement of a long-term gas
    supply contract for which the accrual was $12,437, originally
    recorded in the third quarter of 2002. On May 1, 2007, in
    connection with the sale of the Irving, Texas facility, the
    Company paid $5,600 to terminate this contract, of which $1,700
    was reimbursed by the buyer of the facility. The remaining
    balance of $1,592 is expected to be paid upon the commencement
    of volume manufacturing activity by the buyer in 2008.    2006
    Restructuring Activities
      
    $6,897 in one-time minimum statutory termination benefits
    recorded in accordance with SFAS No. 112. These costs
    related to the termination of employees in Europe.
    $1,681 in one-time severance costs related to the involuntary
    termination of employees, primarily in manufacturing, research
    and development and administration. These benefits costs were
    recorded in accordance with SFAS No. 146.    2005
    Restructuring Activities
        Note 17
    LOSS ON
    SALE AND OTHER CHARGES  Nantes
    Fabrication Facility Sale
   108




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      
    $10,585 associated with the loss on the sale of the
    Companys Nantes fabrication facility, including the cost
    of transferring 319 employees to the buyer.
    $2,614 of building and improvements were removed from operations
    and written down to zero following relocation of certain
    manufacturing activities to Asia.  clean-up
    Note 18
    DISCONTINUED
    OPERATIONS  Grenoble,
    France, Subsidiary Sale
           109




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        (In thousands)Proceeds, net of working capital adjustments

$
122,610Costs of disposition


(2,537
)Net proceeds from the sale


120,073Less:Book value of net assets disposed of


(14,866
)Cumulative translation adjustment effect


4,631Gain on sale of discontinued operations, before income taxes


109,838Provision for income taxes


(9,506
)Gain on sale of discontinued operations, net of income taxes

$
100,332     December 31,


December 31,2006


2005(In thousands)Net revenues

$
79,871


$
114,608Operating costs and expenses


57,509



91,838Income from discontinued operations, before income taxes


22,362



22,770Gain on sale of discontinued operations, before income taxes


109,838



Income from and gain on sale of discontinued operations


132,200



22,770Less: provision for income taxes


(18,899
)


(6,494
)Income from and gain on sale of discontinued operations, net of
    income taxes

$
113,301


$
16,276Income from and gain on sale of discontinued operations, net of
    income taxes, per share:Basic and diluted

$
0.23


$
0.03Weighted-average shares used in basic and diluted income per
    share calculations


487,413



481,534   Note 19
    NET
    INCOME (LOSS) PER SHARE   110




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(In thousands)Income (loss) from continuing operations

$
47,885


$
(98,651
)

$
(49,627
)Income from discontinued operations, net of provision for income
    taxes






12,969



16,276Gain on sale of discontinued operations, net of provision for
    income taxes






100,332



Net income (loss)

$
47,885


$
14,650


$
(33,351
)Weighted-average shares  basic


477,213



487,413



481,534Incremental shares and share equivalents


4,524







Weighted-average shares  diluted


481,737



487,413



481,534Net income (loss) share:BasicIncome (loss) from continuing operations

$
0.10


$
(0.20
)

$
(0.10
)Income from discontinued operations, net of provision for income
    taxes






0.02



0.03Gain on sale of discontinued operations, net of provision for
    income taxes






0.21



Net income (loss) per share  basic

$
0.10


$
0.03


$
(0.07
)DilutedIncome (loss) from continuing operations

$
0.10


$
(0.20
)

$
(0.10
)Income from discontinued operations, net of income taxes






0.02



0.03Gain on sale of discontinued operations, net of income taxes






0.21



Net income (loss) per share  diluted

$
0.10


$
0.03


$
(0.07
)  111




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(In thousands)Employee stock options and restricted stock units outstanding


32,668



29,079



30,653Incremental shares and share equivalents


(4,524
)






Incremental shares and share equivalents excluded from per share
    calculation


28,144



29,079



30,653Common stock equivalent shares associated with:Convertible notes due 2018






8



16Convertible notes due 2021






1,310



4,875Total weighted-average potential shares excluded from per share
    calculation


28,144



30,397



35,544     Note 20
    LEGAL
    AWARDS AND SETTLEMENTS    Note 21
    INTEREST
    AND OTHER INCOME (EXPENSES), NET    Years EndedDecember 31,


December 31,


December 31,2007


2006


2005(In thousands)Interest and other income

$
16,716


$
17,677


$
11,551Interest expense


(12,351
)


(20,039
)


(29,594
)Foreign exchange transaction losses


(389
)


(9,364
)


(1,306
)Total

$
3,976


$
(11,726
)

$
(19,349
)  112




---



##### Table of Contents



Atmel
    Corporation
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 22
    ACCELERATED
    SHARE REPURCHASE PROGRAM      Note 23
    SUBSEQUENT
    EVENTS   113




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm    Internal Control 
    Integrated Framework
            PricewaterhouseCoopers
    LLP
    114




---



##### Table of Contents



Schedule IIATMEL CORPORATIONVALUATION AND QUALIFYING ACCOUNTSFor the years ended December 31, 2007, 2006 and
    2005 Balance at


Charged





Balance atBeginning


(Credited)


Deductions


Endof Year


to Expense


Write-offs


of Year(In thousands)Allowance for doubtful accounts receivable:Year ended December 31, 2007

$
3,605


$
(212
)

$
(282
)


3,111Year ended December 31, 2006


3,944



106



(445
)


3,605Year ended December 31, 2005


10,011



(5,575
)


(492
)


3,944  115




---



##### Table of Contents



UNAUDITED
    QUARTERLY FINANCIAL INFORMATION



The following tables set forth a summary of the Companys
    quarterly financial information for each of the four quarters in
    the years ended December 31, 2007 and 2006: First


Second


Third


FourthYear Ended December 31, 2007(1)

Quarter


Quarter


Quarter


Quarter(In thousands, except per share data)Net revenues

$
391,313


$
404,247


$
418,097


$
425,580Gross profit


139,937



141,642



149,034



149,618Net income

$
28,940


$
678


$
16,553


$
1,714Basic net income per share:Net income

$
0.06


$
0.00


$
0.03


$
0.00Weighted-average shares used in basic net income per share
    calculations


488,842



488,916



485,540



446,003Diluted net income per share:Net income

$
0.06


$
0.00


$
0.03


$
0.00Weighted-average shares used in diluted net income per share
    calculations


494,198



494,244



489,791



449,136   116




---



##### Table of Contents



First


Second


Third


FourthYear Ended December 31, 2006(2)

Quarter


Quarter


Quarter


Quarter(In thousands, except per share data)Net revenues

$
400,784


$
429,488


$
431,734


$
408,881Gross profit


126,382



139,029



151,557



145,150Income (loss) from continuing operations


(1,154
)


2,851



22,260



(122,608
)Income from discontinued operations, net of income taxes


5,862



5,428



1,679



Gain on sale of discontinued operations, net of income taxes










100,332



Net income (loss)

$
4,708


$
8,279


$
124,271


$
(122,608
)Basic net income (loss) per share:Income (loss) from continuing operations

$
(0.00
)

$
0.01


$
0.04


$
(0.25
)Income from discontinued operations, net of income taxes


0.01



0.01



0.00



Gain on sale of discontinued operations, net of income taxes










0.21



Net income (loss)

$
0.01


$
0.02


$
0.25


$
(0.25
)Weighted-average shares used in basic net income (loss) per
    share calculations


485,576



486,928



488,303



488,844Diluted net income (loss) per share:Income (loss) from continuing operations

$
(0.00
)

$
0.01


$
0.05


$
(0.25
)Income from discontinued operations, net of income taxes


0.01



0.01



0.00



Gain on sale of discontinued operations, net of income taxes










0.20



Net income (loss)

$
0.01


$
0.02


$
0.25


$
(0.25
)Weighted-average shares used in diluted net income (loss) per
    share calculations


485,576



493,045



494,066



488,844     (1)
    
    The Company recorded charges for grant repayments of
    $0.3 million and $1 million in the quarters ended
    December 31, 2007 and September 30, 2007,
    respectively. The Company recorded restructuring charges
    (credits) of $13 million, $1 million,
    $(3) million and $2 million in the quarters ended
    December 31, 2007, September 30, 2007, June 30,
    2007 and March 31, 2007, respectively. The Company recorded
    asset impairment recovery of $0 and $1 million in the
    quarters ended December 31, 2007 and September 30,
    2007.(2)
    
    The Company recorded charges for grant repayments of
    $30 million in the quarter ended December 31, 2006.
    The Company recorded restructuring charges of $9 million
    and $0.2 million in the quarters ended December 31,
    2006 and March 31, 2006. The Company recorded asset
    impairment charges of $83 million in the quarter ended
    December 31, 2006. 117




---



##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Effectiveness of Disclosure Controls and Procedures
  Form 10-K, Rule 13a-15(e) Rule 15d-15(e) Form 10-K
  Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
  Internal Control  Integrated
    Framework Internal Control 
    Integrated Framework
  Form 10-K.
  Limitations
    on the Effectiveness of Controls
    Changes
    in Internal Control over Financial Reporting
   118




---



##### Table of Contents



ITEM 9B.
    OTHER
    INFORMATION   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE GOVERNANCE
    MATTERS  Form 10-K
  Code of
    Ethics/Standards of Business Conduct
      ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS   119




---



##### Table of Contents



ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES   120




---



##### Table of Contents



PART IV ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Form 10-K:
  Financial Statements Form 10-K.
  Financial Statement
    Schedules Form 10-K.
  Exhibits Form 10-K:
  3
.1

Restated Certificate of Incorporation of Registrant (which is
    incorporated herein by reference to Exhibit 3.1 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2003, Commission File
    No. 0-19032).3
.2

Amended and Restated Bylaws of Registrant (which is incorporated
    herein by reference to Exhibit 3.1 to the Registrants
    Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on February 22, 2008).3
.3

Certificate of Determination of Rights, Preferences and
    Privileges of Series A Preferred Stock (which is
    incorporated herein by reference to Exhibit A of
    Exhibit 1 to the Registrants Registration Statement
    on
    Form 8-A/12G/A
    (File
    No. 000-19032)
    filed on December 6, 1999).4
.1

Amended and Restated Preferred Shares Rights Agreement
    dated as of October 18, 1999, between Atmel Corporation and
    BankBoston, N.A., a national banking association, including the
    Certificate of Determination, the form of Rights Certificate and
    the Summary of Rights (which is incorporated herein by reference
    to Exhibit 1 to the Registrants Registration
    Statement on
    Form 8-A/12G/A
    (File
    No. 000-19032)
    filed on December 6, 1999).10
.1+

1986 Incentive Stock Option Plan, as amended, and forms of stock
    option agreements thereunder (which is incorporated herein by
    reference to Exhibit 10.1 to the Registrants
    Registration Statement on
    Form S-1
    (File
    No. 33-38882)
    declared effective on March 19, 1991).10
.2+

1991 Employee Stock Purchase Plan, as amended (which is
    incorporated herein by reference to Exhibit 10.2 to the
    Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2002, Commission File
    No. 0-19032).10
.3+

Form of Indemnification Agreement between Registrant and its
    officers and directors (which is incorporated herein by
    reference to Exhibit 10.4 to the Registrants Annual
    Report on
    Form 10-K
    for the year ended December 31, 1999, Commission File
    No. 0-19032).10
.4+

2005 Stock Plan and forms of agreements thereunder (which is
    incorporated herein by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on May 16, 2005).10
.5+

Amendment to 2005 Stock Plan (which is incorporated herein by
    reference to Exhibit 10.1 to the Registrants Current
    Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on July 31, 2007).10
.6+

Employment Agreement dated as of August 6, 2006 between
    Registrant and Steven Laub (which is incorporated herein by
    reference to Exhibit 10.1 to the Registrants Current
    Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on March 19, 2007).10
.7+

Amendment to Employment Agreement dated as of March 13,
    2007 between Registrant and Steven Laub (which is incorporated
    herein by reference to Exhibit 10.2 to the
    Registrants Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on March 19, 2007).10
.8+

Stock Option Fixed Exercise Date Form (which is incorporated by
    reference to Exhibit 10.1 to the Registrants Current
    Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on January 8, 2007).10
.9+

Description of Amendment of Certain Option Agreements (which is
    incorporated herein by reference to Item 5.02 to the
    Registrants Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on April 12, 2007). 121




---



##### Table of Contents



10
.10+

Description of 2007 Executive Bonus Plan (which is incorporated
    herein by reference to item 5.02 to the Registrants
    Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on August 31, 2007).10
.11

Facility Agreement, dated as of March 15, 2006, by and
    among the Registrant, Atmel Sarl, Atmel Switzerland Sarl, the
    financial institutions listed therein, and Bank of America,
    N.A., as facility agent and security agent (which is
    incorporated herein by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on March 21, 2006).10
.12

Share Purchase Agreement, dated as of July 12, 2006,
    between e2v technologies SAS and Atmel Paris SAS (which is
    incorporated herein by reference to Exhibit 2.1 to the
    Registrants Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on July 13, 2006).10
.13

Form of Collared Accelerated Share Repurchase Confirmation
    (which is incorporated herein by reference to Exhibit 10.1
    to the Registrants Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on August 27, 2007).10
.14

Agreement for the Sale and Purchase of Property, dated
    October 8, 2007, by and among Atmel North Tyneside Limited,
    Atmel Corporation, Highbridge Business Park Limited and
    Highbridge Properties Plc.10
.15

Agreement for the Sale and Purchase of Certain Assets, dated
    October 8, 2007, by and among Atmel North Tyneside Limited,
    Atmel Corporation, and Taiwan Semiconductor Manufacturing
    Company Limited.10
.16

Agreement in Relation to the Removal of Equipment, dated
    October 8, 2007, by and among Atmel North Tyneside Limited,
    Atmel Corporation, Highbridge Business Park Limited, Highbridge
    Properties Plc., and Taiwan Semiconductor Manufacturing Company
    Limited.10
.17+

Separation Agreement and Mutual Release dated as of
    November 16, 2007 between Registrant and Graham David
    Turner.21
.1

Subsidiaries of Registrant.23
.1

Consent of PricewaterhouseCoopers LLP, Independent Registered
    Public Accounting Firm.24
.1

Power of Attorney (included on the signature pages hereof).31
.1

Certification of Chief Executive Officer pursuant to Securities
    Exchange Act
    Rules 13a-14(a)
    and
    15d-14(a).31
.2

Certification of Chief Financial Officer pursuant to Securities
    Exchange Act
    Rules 13a-14(a)
    and
    15d-14(a).32
.1

Certification of Chief Executive Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.32
.2

Certification of Chief Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.     +
    
    Indicates management compensatory plan, contract or arrangement.(b)
    
    Exhibits. See Item 15(a)(3) above.(c)
    
    Financial Statement Schedules. See Item 15(a)(2) above. 122




---



##### Table of Contents



SIGNATURES  Form 10-K
    By:
    /s/  Steven
    Laub       POWER OF
    ATTORNEY
  Form 10-K
  Form 10-K
  Signature

Title/s/  Steven
    LaubSteven
    Laub

President, Chief Executive Officer and Director (principal
    executive officer)/s/  Robert
    AveryRobert
    Avery

Vice President Finance and Chief Financial Officer (principal
    financial and accounting officer)/s/  Tsung-Ching
    WuTsung-Ching
    Wu

Director/s/  T.
    Peter ThomasT.
    Peter Thomas

Director/s/  Dr. Chaiho
    KimDr. Chaiho
    Kim

Director/s/  David
    SugishitaDavid
    Sugishita

Director/s/  Papken
    Der TorossianPapken
    Der Torossian

Director/s/  Jack
    L. SaltichJack
    L. Saltich

Director/s/  Charles
    CarinalliCharles
    Carinalli

Director  123




---



##### Table of Contents



EXHIBIT INDEX  3
.1

Restated Certificate of Incorporation of Registrant (which is
    incorporated herein by reference to Exhibit 3.1 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2003, Commission File
    No. 0-19032).3
.2

Amended and Restated Bylaws of Registrant (which is incorporated
    herein by reference to Exhibit 3.1 to the Registrants
    Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on February 22, 2008).3
.3

Certificate of Determination of Rights, Preferences and
    Privileges of Series A Preferred Stock (which is
    incorporated herein by reference to Exhibit A of
    Exhibit 1 to the Registrants Registration Statement
    on
    Form 8-A/12G/A
    (File
    No. 000-19032)
    filed on December 6, 1999).4
.1

Amended and Restated Preferred Shares Rights Agreement
    dated as of October 18, 1999, between Atmel Corporation and
    BankBoston, N.A., a national banking association, including the
    Certificate of Determination, the form of Rights Certificate and
    the Summary of Rights (which is incorporated herein by reference
    to Exhibit 1 to the Registrants Registration
    Statement on
    Form 8-A/12G/A
    (File
    No. 000-19032)
    filed on December 6, 1999).10
.1+

1986 Incentive Stock Option Plan, as amended, and forms of stock
    option agreements thereunder (which is incorporated herein by
    reference to Exhibit 10.1 to the Registrants
    Registration Statement on
    Form S-1
    (File
    No. 33-38882)
    declared effective on March 19, 1991).10
.2+

1991 Employee Stock Purchase Plan, as amended (which is
    incorporated herein by reference to Exhibit 10.2 to the
    Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2002, Commission File
    No. 0-19032).10
.3+

Form of Indemnification Agreement between Registrant and its
    officers and directors (which is incorporated herein by
    reference to Exhibit 10.4 to the Registrants Annual
    Report on
    Form 10-K
    for the year ended December 31, 1999, Commission File
    No. 0-19032).10
.4+

2005 Stock Plan and forms of agreements thereunder (which is
    incorporated herein by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on May 16, 2005).10
.5+

Amendment to 2005 Stock Plan (which is incorporated herein by
    reference to Exhibit 10.1 to the Registrants Current
    Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on July 31, 2007).10
.6+

Employment Agreement dated as of August 6, 2006 between
    Registrant and Steven Laub (which is incorporated herein by
    reference to Exhibit 10.1 to the Registrants Current
    Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on March 19, 2007).10
.7+

Amendment to Employment Agreement dated as of March 13,
    2007 between Registrant and Steven Laub (which is incorporated
    herein by reference to Exhibit 10.2 to the
    Registrants Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on March 19, 2007).10
.8+

Stock Option Fixed Exercise Date Form (which is incorporated by
    reference to Exhibit 10.1 to the Registrants Current
    Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on January 8, 2007).10
.9+

Description of Amendment of Certain Option Agreements (which is
    incorporated herein by reference to Item 5.02 to the
    Registrants Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on April 12, 2007).10
.10+

Description of 2007 Executive Bonus Plan (which is incorporated
    herein by reference to item 5.02 to the Registrants
    Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on August 31, 2007).10
.11

Facility Agreement, dated as of March 15, 2006, by and
    among the Registrant, Atmel Sarl, Atmel Switzerland Sarl, the
    financial institutions listed therein, and Bank of America,
    N.A., as facility agent and security agent (which is
    incorporated herein by reference to Exhibit 10.1 to the
    Registrants Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on March 21, 2006).10
.12

Share Purchase Agreement, dated as of July 12, 2006,
    between e2v technologies SAS and Atmel Paris SAS (which is
    incorporated herein by reference to Exhibit 2.1 to the
    Registrants Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on July 13, 2006).10
.13

Form of Collared Accelerated Share Repurchase Confirmation
    (which is incorporated herein by reference to Exhibit 10.1
    to the Registrants Current Report on
    Form 8-K
    (Commission File
    No. 0-19032)
    filed on August 27, 2007).10
.14

Agreement for the Sale and Purchase of Property, dated
    October 8, 2007, by and among Atmel North Tyneside Limited,
    Atmel Corporation, Highbridge Business Park Limited and
    Highbridge Properties Plc.




---



##### Table of Contents



10
.15

Agreement for the Sale and Purchase of Certain Assets, dated
    October 8, 2007, by and among Atmel North Tyneside Limited,
    Atmel Corporation, and Taiwan Semiconductor Manufacturing
    Company Limited.10
.16

Agreement in Relation to the Removal of Equipment, dated
    October 8, 2007, by and among Atmel North Tyneside Limited,
    Atmel Corporation, Highbridge Business Park Limited, Highbridge
    Properties Plc., and Taiwan Semiconductor Manufacturing Company
    Limited.10
.17+

Separation Agreement and Mutual Release dated as of
    November 16, 2007 between Registrant and Graham David
    Turner.21
.1

Subsidiaries of Registrant.23
.1

Consent of PricewaterhouseCoopers LLP, Independent Registered
    Public Accounting Firm.24
.1

Power of Attorney (included on the signature pages hereof).31
.1

Certification of Chief Executive Officer pursuant to Securities
    Exchange Act
    Rules 13a-14(a)
    and 15d-14(a).31
.2

Certification of Chief Financial Officer pursuant to Securities
    Exchange Act
    Rules 13a-14(a)
    and 15d-14(a).32
.1

Certification of Chief Executive Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.32
.2

Certification of Chief Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.     +
    
    Indicates management compensatory plan, contract or arrangement.