Atmel Advances Wafer Fabrication Plans Through Alliance with 1st Silicon

San Jose, CA, and Kuching, Sarawak, Malaysia - August 2nd, 2005. Atmel® Corporation (Nasdaq: ATML), a global leader in the development and fabrication of advanced semiconductor solutions, and 1st Silicon, a premier semiconductor-manufacturing foundry, announced today the start of Atmel Flash memory production at 1st Silicon’s Kuching, Sarawak Malaysia foundry.

Production of Atmel's 0.18 micron serial flash is now ramping at 1st Silicon's state-of-the-art fab. In addition to the 0.18 micron flash production, Atmel will also manufacture 0.18 micron CMOS Mixed Signal products and 0.13 micron flash at 1st Silicon. The two companies are discussing furthering their relationship in other areas.

Atmel gains both lower cost for its 0.18um technology and additional capacity for its 0.13um products, and 1st Silicon expands its customer base, allowing further economies of scale. The move fits with Atmel's previously announced outsourcing strategy.

"Using 1st Silicon's high-quality wafer facility fits our aggressive cost-reduction and production capability goals," said Steve Schumann Vice President, General Manager, Non-Volatile Memories. "Atmel is the leader in Serial Flash memory and this action will help us remain so."

"Continuing our successful partnership with a world-class customer like Atmel underscores our charter to provide customized manufacturing processes tailored to specific company requirements," said Dr. John Nelson, Chief Executive Officer of 1st Silicon. "We have experienced teams working extensively in both memory and logic technologies, making the alliance with Atmel ideal."

About 1st Silicon

1st Silicon (http://www.1si.com) is a dedicated semiconductor foundry founded in 1998 by the Malaysian State of Sarawak. 1st Silicon's 200mm wafer fab facility is designed for production of more than 45,000 wafers per month for 0.25um down to 0.13um geometries. The Company offers volume production of digital and mixed-signal CMOS technologies in 0.25um and 0.18um processes. 1st Silicon started production of 0.25um in Q1 2001 and 0.18um qualification in Q1 2003. 0.15um will go into production in Q3 2005. 0.13um flash is in production. The Company also focuses on niche markets by offering reliable and cost-effective embedded non-volatile memory, high voltage, CMOS image sensor and CCD processes. 1st Silicon's customers include integrated device manufacturers and fabless semiconductor companies worldwide. 1st Silicon has its headquarters in Kuching, Sarawak, Malaysia, and sales offices in US, Korea and Taiwan.

About Atmel

Atmel is a worldwide leader in the design and manufacture of microcontrollers, advanced logic, mixed-signal, nonvolatile memory and radio frequency (RF) components. Leveraging one of the industry's broadest intellectual property (IP) technology portfolios, Atmel is able to provide the electronics industry with complete system solutions. Focused on consumer, industrial, security, communications, computing and automotive markets, Atmel ICs can be found Everywhere You Are®.

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