Atmel Awarded $43.1M for Breach of Contract and Misappropriation of Trade Secrets by LM Ericsson Telefon, AB

-- Atmel Corporation (Nasdaq: ATML), a worldwide leader in the development, fabrication and sale of advanced semiconductors, today announced that it was awarded approximately $43.1 million in damages after the International Centre for Dispute Resolution, International Arbitration Tribunal found LM Ericsson Telefon, AB and its wholly-owned subsidiary, Ericsson Mobile Platform (collectively "Ericsson") liable for numerous breaches of contract and misappropriation of trade secrets relating to Atmel's proprietary AVR microcontroller technology. Ericsson is required to make payment within 30 days of November 21, 2005 in accordance with the award.

The Arbitration Panel also awarded Atmel an immediate injunction against Ericsson and those "acting in concert or participation with it," including, Sony Ericsson and any other AVR ASIC licensees of Ericsson, as well as Texas Instruments who manufactured and sold AVR chipsets to the Ericsson licensees. Essentially, the injunction prevents Ericsson from, among other things, authorizing any entity to sell, use or otherwise dispose of, any ASIC embedding the AVR or modifications thereof. The injunction further directs Ericsson to, among other things, inform Sony Ericsson and any other ASIC AVR licensee of Ericsson that they must cease production of all communications equipment that is based on or includes an ASIC AVR or modifications thereof. Atmel did not seek to prohibit Ericsson's use of Atmel's standard AVR parts.

"Inasmuch as Ericsson, Sony Ericsson and Texas Instruments are some of Atmel's most valued customers, it is difficult to say that we are pleased with the outcome as we had always hoped to resolve this matter without resorting to litigation. Notwithstanding the Award, Atmel continues to value its business relationships with these entities and we hope that this will enable us to start afresh with them on on-going and future business," says Julie Mar-Spinola, Vice President, Global Affairs -- Litigation and Intellectual Property.

Atmel was represented by Farella Braun + Martel LLP. Lead trial counsel was John Cooper, along with Grace Won and Andy Leibnitz and assisted by a stellar trial team of talented attorneys and staff, including Atmel's Sr. Litigation Counsel, Cynthia Bright.

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(R).