Atmel Raises Fourth Quarter Guidance, Approaching Profitability; Demand Strongest in PC and Consumer Markets.

Business Editors/High-Tech Writers

SAN JOSE, Calif.--(BUSINESS WIRE)--Dec. 10, 2003

Atmel Corporation (Nasdaq: ATML), a worldwide leader in the development, fabrication and sale of advanced semiconductors, today raised its guidance for the fourth quarter ending December 31, 2003.

The Company now anticipates that in the fourth quarter of 2003, revenues should be up 7-10% from Q3, raising its guidance from the 3-6% sequential growth given on October 16, 2003. Gross margins are also on track to be stronger than expected, as the Company benefits from increased utilization, richer product mix and a stable pricing environment.

"Broad-based demand strength has been even stronger than we expected when, in October, we stated that the upturn for the next semiconductor cycle had arrived," stated George Perlegos, Atmel's President and Chief Executive Officer. "We are seeing the increased demand in virtually all end markets, while PC and consumer markets tend to be the strongest."

Operating expenses should be about on plan.

The Company expects that based on current trends, it could reach operating break even this quarter, resulting in a small net loss after taxes and interest expense.

"Virtually every product line has been at least slightly better than expected," Perlegos added. "The stronger revenue upsides have come from smart cards, serial EEPROM products, microcontrollers, Data Flash(TM) and flash products.

"Overall pricing has stabilized, and we anticipate that we will enjoy some pricing increases in the first quarter of 2004," concluded Perlegos.

No conference calls will be held in conjunction with the business update. Atmel's fourth quarter financial results are scheduled to be released on January 22, 2004.

About Atmel

Founded in 1984, Atmel Corporation is headquartered in San Jose, California, with manufacturing facilities in North America and Europe. Atmel designs, manufactures and markets worldwide, advanced logic, mixed-signal, nonvolatile memory and RF semiconductors. Atmel is also a leading provider of system-level integration semiconductor solutions using CMOS, BiCMOS, SiGe, and high-voltage BCDMOS process technologies.

(C) Atmel Corporation 2003. All rights reserved. Atmel and the Atmel logo are the registered trademarks of Atmel Corporation or its subsidiaries. Other terms and product names may be the trademarks of others.

Information in this release regarding Atmel's forecasts, outlook, expectations and beliefs are forward-looking statements that involve risks and uncertainties. These statements include statements about current market conditions and Atmel's expected revenue, operating costs and gross margins,and net income(loss) for the fourth quarter of 2003. All forward-looking statements included in this release are based upon information available to Atmel as of the date of this release, which may change, and we assume no obligation to update any such forward-looking statement. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to such differences include the impact of competitive products and pricing, adverse changes in the market,, timely introduction of new technologies, ability to ramp new products into volume, industry wide shifts in supply and demand for semiconductor products, industry and/or company overcapacity, effective and cost efficient utilization of manufacturing capacity, financial stability in foreign markets, , and other risks detailed from time to time in the Atmel's SEC reports and filings, including our Form 10-K, filed on March 24, 2003 and subsequent Form 10-Q reports.