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Atmel to Acquire Quantum Research Group

Atmel has signed a definitive agreement to purchase Quantum research group.

Atmel Corporation, announced that it has signed a definitive agreement to acquire Quantum Research Group Ltd. ("Quantum"), a developer of capacitive sensing IP and solutions for user interfaces. The acquisition of Quantum provides Atmel with an immediate presence in touch sensing, one of the fastest growing markets for microcontrollers. The acquisition is expected to be accretive to Atmel's net income per share in the fourth quarter of 2008 and thereafter.

"This transaction is an important step in our strategy to expand and strengthen our proprietary microcontroller product portfolio and accelerate Atmel's profitable growth," said Steve Laub, Atmel's President and Chief Executive Officer. "The market for touch sense technologies is experiencing explosive growth, and Quantum has been a pioneer in this market since its founding in 1996. Indeed, Quantum's technology has revolutionized the way consumers experience and interact with electronics. By integrating Quantum's capacitive sensing capabilities with Atmel's microcontroller technology, we will be able to offer best-in-class user interface solutions that we expect to differentiate Atmel and drive significant growth. In addition, we expect to substantially increase Quantum's customer reach by leveraging Atmel's global sales and marketing network. This acquisition is a natural extension of the partnership we have had with Quantum. We look forward to capitalizing on each company's technology leadership and the product synergies created by this transaction to deliver even greater value to our customers and shareholders."

Offering a wide variety of touch and proximity sensing solutions, privately-held Quantum is a supplier of capacitive sensing solutions. Capacitive sensing products are rapidly penetrating the overall touch sensing technology market, which is expected to grow from over $1 billion in 2007 to more than $3 billion in 2011. Touch sensing in mobile phones alone is expected to grow from 50 million units in 2007 to 400 million units by 2011. Quantum's innovative touchpad navigation technologies support a wide range of markets and applications, including mobile phone handsets, consumer electronics (such as personal media players and audio/video systems), home appliances, home security, PC peripherals, medical, automotive, and industrial equipment. Quantum's products are sold to an extensive base of blue chip customers including all of the world's leading mobile phone handset manufacturers.

"As our IP has been optimized to run on Atmel's microcontrollers, the acquisition will allow Quantum to significantly expand and support its capacitive touch customer base by allowing us to make use of Atmel's broad technical and sales resources," said Hal Philipp, Chief Executive Officer of Quantum Research Group. "We are delighted to join with Atmel and look forward to jointly capitalizing on the many benefits created by this transaction."

Under the terms of the agreement, Atmel will pay approximately $88 million in cash at closing. Upon the satisfaction of certain contingencies over the next three years, certain Quantum shareholders may also receive up to an additional $42 million in cash and Atmel common stock, the ratio of which will be determined by Atmel at closing. The acquisition has been approved by Atmel's Board of Directors and is expected to close in the first quarter of 2008, subject to customary closing conditions and regulatory approval. Following the completion of the transaction, Quantum will become part of Atmel's microcontroller business unit, and Mr. Philipp will join Atmel.

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