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On Wednesday night, chip builder Atmel (Nasdaq: ATML  ) reported a 31% year-over-year sales jump -- after excluding the results of a business line the company divested -- and 136% higher non-GAAP earnings. Both numbers beat Street expectations; revenue landed at the high end of management guidance; and record gross margins at 51.8% were fatter than the company expected.

But all is not perfect in the land of touchscreen controllers. The new revenue guidance is a tad lower than the analyst consensus, even if you assume that Atmel will hit the high end of its flat-to-up-4% range. Microcontrollers and touch-controller chips are heading up as always but held back by somewhat lower radio and automotive chips.

Broadcom (Nasdaq: BRCM  ) and Texas Instruments (NYSE: TXN  ) are the preferred providers of touchscreen controllers to Apple (Nasdaq: AAPL  ) , but Atmel is a big name outside Cupertino. "We've been the very clear leader in helping the non-Apple guys deliver their tablets into the marketplace," says CEO Steve Laub, including high-profile launches such as the Motorola Mobility (NYSE: MMI  ) Xoom and the Samsung Galaxy Tab.

CypressSemiconductor (Nasdaq: CY  ) won the touchscreen controller slots in the Research In Motion (Nasdaq: RIMM  ) BlackBerry PlayBook and Hewlett-Packard (NYSE: HPQ  ) TouchPad, but I don't see Atmel crying over that missed opportunity. Sales of Android tablets may have been slow, but moving down to the BlackBerry and HP lines is like driving from Beverly Hills to Compton -- by all accounts, those tablets are mostly collecting dust on store shelves. Cypress may not see any refill orders for those controllers, because there won't be any additional manufacturing runs on stale tablets.

So Atmel is riding the smartphone and tablet waves with a big smile. Life ain't perfect, but it's pretty darn good. The stock has gained 56% over the last year, despite dropping 35% in six months. Right now, Atmel trades for just 7.4 times trailing earnings (and 12 times its operating profit). Where are these shares going next? Add Atmel to your Foolish watchlist, and you'll be ready to buy or sell when the price is right for taking action:

Fool contributor Anders Bylund holds no position in any of the companies discussed here. The Motley Fool owns shares of Apple, Research In Motion, and Texas Instruments. Motley Fool newsletter services have recommended buying shares of Apple and Cypress Semiconductor. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio, follow him on Twitter or Google+, or peruse our Foolish disclosure policy.

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