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Atmel Corporation (ATML - Analyst Report) recently declared that its maXTouch controllers have been selected to power nearly 30 Windows 8 touch-compatible devices including tablets, Ultrabooks and notebook PCs. Atmel’s maXTouch controllers are noted for their robust features such as multi-touch with infinite touch capabilities, facility of providing superior assistance to the large-screen devices and optimized power consumption.

These devices mostly designed by Microsoft and other renowned manufacturers, are scheduled to be released by the end of 2012. Atmel has entered into a partnership with Microsoft to offer a superior touchscreen experience for Windows 8 operating system users through its first-touch latency, finger separation and edge gestures services.

Management stated that with the introduction of Windows 8, the acceptance of touch-sensing technology has increased considerably and it is also expected to grow with the company’s latest mXT3432S touchscreen controllers. The company’s maXTouch solutions continue to drive a number of touch devices and are now going to support Windows 8 user-friendly platform. The company is highly optimistic regarding its association with Microsoft, which is likely to develop in the future.

Fast-growing touch-sensing technology is one of the major growth drivers for Atmel's microcontroller business. The phenomenal improvement is led by continued rapid use of smartphones, the rise of Android tablets and the penetration into the latest applications including tablets, netbooks, cameras, printers, automotive and other areas.

Earlier, Samsung had selected Atmel’s maXTouch mXT1664S controller to power its recently launched Galaxy Note 10.1 tablet touchscreen. The high demand for the company’s latest maXTouch solutions are expected to improve its business in the touch sensing market.

Although Atmel is a globally renowned enterprise, it operates in an intensely competitive landscape. The company’s primary competitors include big players such as LSI Corporation and Semiconductor Manufacturing International Corp. (SMI - Snapshot Report). LSI recently launched its latest Syncro MX-B Rack Boot Appliance to enhance the potential of the boot drives. Hence, the company has to go through rapid technological changes, evolving standards which may turn out to be costly.

The current Zacks Consensus Estimates for Atmel are 4 cents and 19 cents for fourth quarter of 2012 and for 2012, respectively. As the current challenging macroeconomic conditions persist the company continues to have a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating. Nevertheless, we maintain a ‘Neutral’ recommendation on the stock for the long run.

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