Atmel to Jointly Develop Secure Windows Powered Smart Card Systems With Microsoft; Three Year Agreement Puts Atmel in Secure Internet E-commerce Arena.

Business Editors & High-Tech Writers

MIAMI--(BUSINESS WIRE)--May 2, 2000

Atmel Corporation (Nasdaq:ATML) today announced a multi-year agreement with Microsoft Corp. to jointly support the development of Smart Card systems using Atmel's AT90SC AVR family of flash-based Smart Card ICs and the Microsoft Windows for Smart Card operating system.

Under the terms of this three-year agreement Microsoft will create Windows for Smart Card development tools for use in implementing designs on the AT90SC Secure AVR-based microcontrollers for Smart Card systems. The tools will include the Microsoft Windows for Smart Card operating system (OS) with Visual Basic (VB), PC simulator support, VB Application Builder, Visual C++ Application Builder, Platform Builder, custom module APIs, compilers, and Windows for Smart Card CPU test procedures for certification of Atmel's AVR based Smart Card ICs. The Microsoft OS will include the ISO 7816 communications protocol, libraries for crypto development and support for corporate IT, campus, medical, access control, GSM-based secure data communication and payment processing plus Europay-MasterCard-Visa (EMV)-based payment, including Internet applications. Atmel will provide AVR secure microcontroller ICs to Microsoft customers and development partners, as well as support all future releases of Windows for Smart Cards.

Windows for Smart Cards is experiencing accelerating industry adoption because it is based on the PC/SC interface standard, is ISO 7816 compatible, and integrates well with other widely-adopted corporate systems including Microsoft Windows NT and Microsoft Windows 2000.

"Atmel's Smart Card ICs meet the needs of high-end Smart Card applications, even those with substantial data storage requirements that may exceed 128 Kbts. That's a lot of data to put on a credit card-sized appliance, but Atmel has managed to develop a unique high-density, non-volatile memory technology to address such needs," said Mike Dusche, product manager for Microsoft's Windows for Smart Cards. "In addition, high-end applications generally also require extensive security protection, which Atmel's Smart Card ICs offer.

"For these reasons," Dusche continued, "We view Atmel as a key player in getting Smart Card for Windows accepted in the high-end applications. We think the combination of our Windows for Smart Cards operating system and Atmel's AVR-based Smart Card ICs offer the most efficient development path for designers of high-end systems."

Atmel's Smart Card ICs offer the highest level security available and very fast data encryption/decryption and are capable of supporting 1024 bit keys - about twice the security of the most secure military applications. Atmel makes the only flash-based, in-system programmable Smart Card chips on the market. Flash technology produces significant security benefits and in-system programmability speeds up development time to market, and also makes it possible to easily update the data on the card without compromising security.

George Perlegos, Atmel's President and CEO said, "This agreement with Microsoft strengthens our already strong position in the secure microcontrollers and Smart Card IC market. Atmel is currently the third world wide leading supplier of smart card ICs. I believe Microsoft is quickly becoming the leading vendor of operating systems for Smart Card applications. The company offers the highest level of tool development and customer support, which is why Windows for Smart Cards, in my opinion, far and away the leading Smart Card development platform. According to Dataquest the total market for smart cards is expected to reach $3.4 billion in 2001. We believe the Microsoft support for Smart Card applications will be a primary factor in achieving this growth."

Smart Cards provide a completely portable, extremely secure means of storing, encrypting and decrypting data, making them ideal for providing secure electronic identification. Atmel's AT90SC Crypto controller ICs include a high performance AVR RISC Microcontroller, SC16 crypto-coprocessor, random word generator, flash memory, EEPROM Memory, SRAM and an ISO7816 interface. Bus scrambling, multi-metal layer technology, tamper proof hardware and other security features including a hardware embedded unique ID number, render the system firmware externally unreadable and prevent reverse engineering.

The combination of the AVR's high throughput and the crypto co-processor's ability to deliver a 1024-bit encrypted electronic signature in 180 ms, provide ultra fast encryption and decryption.

About Atmel

Founded in 1984, Atmel Corporation is headquartered in San Jose, California with principal manufacturing facilities in Colorado Springs, Colorado, Nantes, Rousset and Grenoble, France and Heilbronn, Germany. Atmel designs, manufactures and markets on a worldwide basis advanced logic, mixed-signal, nonvolatile memory, and RF semiconductors. Atmel is also a leading provider of system level integration semiconductor solutions using advanced CMOS, BiCMOS, BiPolar and SiGe process technologies.

Atmel product and financial information are available from its Fax-on-Demand service. In North America, call 1-800-292-8635 or Internationally, call 1-408-441-0732. Requests may be made via e-mail to [e-mail] or by visiting Atmel's website at www.atmel.com.

Atmel, the Atmel logo and combinations thereof are trademarks of Atmel Corporation. Additional terms and product names in this document may be trademarks of others.