Atmel Aggressive on Touch Sensing

Atmel Corp. (ATML - Analyst Report) recently released its new maXTouch(TM) family of capacitive touchscreen controller solutions. These solutions are capable of supporting an unlimited number of unique simultaneous touches with a high video-quality screen refresh rate.

Based in San Jose, California, Atmel designs, develops, manufactures, and markets a range of semiconductor integrated circuit (IC) products for communication, consumer electronics, and the computer market.

According to iSuppli Corp. (global leader in technology value chain research and advisory services), worldwide demand for touch screen modules will exceed $6.4 billion by 2013, making touch interfaces the fastest growing segment in the displays industry. Multi-touch solutions will have significant advantages across a broad range of applications and iSuppli believes Atmel has a compelling product for a very emerging market.

The company is aggressively marketing its new maxTouchTM technology. Touch-sensing technology is the fastest growing area in Atmel's microcontroller business and it is expected to remain a major growth driver in the coming quarters. Atmel's maxTouchTM is beginning to gain traction among the OEMs and is expected to be one of the leading new technologies in the smart-phone and large screen applications.

Management expects to release additional maXTouch touchscreen solutions in the fourth quarter of 2009 and 2010.

Earlier, the company reported weak results for the second quarter as weak demand in all electronics markets since the fourth quarter of 2008 continued to impact the top-line. In addition, reduced inventory levels held by distributors also resulted in low shipment levels compared to prior periods. Margins declined due to a planned reduction in factory utilization in two of the company’s wafer fabrication facilities.

Atmel plans to dispose off its Application Specific Integrated Circuits (ASIC) business as management is planning to transform Atmel into a microcontroller-based company, which it expects will improve the cost structure and unlock value.

Going forward, management stated that though visibility remains limited, order patterns are beginning to normalize across all product lines. The company competes with bigwigs like in LSI Corp. (LSI - Analyst Report) and Microchip Technology Inc. (MCHP - Analyst Report). With inventory correction almost over in the semiconductor industry, we expect margins to improve in the second half of 2009.