Chipmaker Atmel Looks Like a Sound Long-Term Bet

A strong product portfolio and important customers can take Atmel to new highs.

Apr 15, 2014 at 9:00PM

Semiconductor company Atmel (NASDAQ:ATML) is primarily known for its microcontrollers that are used in various touchscreen applications. The company's chips are used in Microsoft (NASDAQ:MSFT) and Samsung's (NASDAQOTH:SSNLF) products, which is why it has a big market to tap into on the back of growth in mobile devices and Windows 8.1 systems. 

Atmel has been continually upgrading its product portfolio. It has recorded a number of design wins and certifications to strengthen its chances of benefiting from different opportunities going forward. Let's take a look at how the company is positioned and if it is a good long-term investment.

A strong product portfolio
Atmel has increased its market share in the core microcontroller business, achieving strong momentum with its new products. The introduction of a record number of new 32-bit core microcontroller products has helped Atmel strengthen its position in the market.

Atmel's new touch product portfolio, including the new T series of touchscreen controllers, should enable it to benefit from large-screen applications and gain market share in smartphones and small to mid-sized tablets. Also, Atmel's XSense metal mesh sensors are now in volume production and are being shipped to multiple customers, including Tier 1 OEMs such as HP and Asus. 

Atmel is focused on making its products more efficient. For example, its new SAMA5D3 devices are small and can take higher temperatures while maintaining a high level of performance and low-power operations. The device is used in industrial applications, including home and building automation, medical electronics, and consumer applications.

Atmel's latest ARM Cortex-M4-based microcontrollers combine high performance and ultra-low power in a small form factor. The company is targeting battery-powered consumer applications such as smartphones, tablets, and ultrabooks, along with wearables and audio devices with these solutions. Further, Atmel has expanded its sensor partner program with the addition of Hillcrest Labs to develop turnkey sensor hub solutions to drive demand in the smartphone category.

Key customers to drive growth
Atmel had recorded a key design win in mobile devices last year with Samsung. The company provided its microcontroller for the Galaxy S4 Mini. This year, Samsung plans to release a mini version of its latest Galaxy S5 phone as well. Given that Atmel provides cheap and low-power components, it might win a spot in the Galaxy S5 Mini this year since it is a cheaper device.

In addition, Samsung's growing clout in the tablet market should also help Atmel benefit from growth in tablet shipments. According to ZDNet, Samsung's worldwide tablet market share in the first quarter increased to 23%, with the company shipping 14 million tablets. Samsung is targeting both emerging markets and developed countries with its tablet portfolio this year, and it aims to become the market leader by overtaking Apple. This is great news for a Samsung supplier such as Atmel.

On the other hand, in the large-screen windows device market, Atmel is actively engaged in well over 225 different Windows 8 and Windows 8.1 programs. It has won multiple designs and is expanding its presence in the tablet market, driven by the superior performance of its new T series products.

Atmel had supplied the two chips for Microsoft's Surface 2 tablet. This could be a big boost for Atmel since Microsoft's Surface sales had more than doubled on a sequential basis last quarter. The Windows tablet raked in $893 million in sales in the holiday season.  

The sharp uptick in Surface sales is a positive indicator for Microsoft, and the same can be said about Atmel. In addition, since support for Windows XP devices has been ended, and the Windows 8.1 operating system is gradually gaining momentum, Atmel can expect a boost in sales of touchscreen computing systems. 

Bottom line
Atmel has a lot of good stuff going for it. The company's new products are gaining momentum, and the growth in sales of customers such as Samsung and Microsoft should help expand its addressable market. The stock might have underperformed the NASDAQ index in the last year, with gains of just 17%, but it still looks like a good investment considering the prospects. 

Atmel may be a decent investment, but your credit card isn't
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

Ayush Singh has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. 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. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers