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Microchip, ON Semi 'disappointed'

Posted: 03 Nov 2008     Print Version  Bookmark and Share

Keywords:takeover bid  nonvolatile memory  automotive businesses  manufacturing services 

Microchip Technology Inc. and On Semiconductor Corp. are ''disappointed'' with Atmel Corp.'s rejection of a proposed takeover bid.

As reported, Microchip and On Semiconductor are combining forces in an attempt to acquire Atmel in a deal that values the latter at Rs.11,508.37 crore ($2.3 billion). Microchip is leading the initiative, and the deal would in part be financed by the sale of Atmel's nonvolatile memory and RF and automotive businesses to On Semiconductor.

Atmel has repeatedly rejected the offer. After the latest rejection slip, Microchip and On Semiconductor said they will consult with their respective boards and advisors and will determine their next steps in due course.

Meanwhile, On Semiconductor said that total revenues in the third quarter of 2008 were a record Rs.2,909.62 crore ($581.5 million), an increase of approximately 3 per cent from the second quarter of 2008. During the third quarter of 2008, the company reported GAAP net income of Rs.306.22 crore ($61.2 million), or Rs.7.51 ($0.15) per share on a fully diluted basis.

''Based upon product booking trends, backlog levels, manufacturing services revenues and estimated turns levels, we anticipate that total revenues will be approximately Rs.2,501.82 crore to Rs.2,752.00 crore ($500 to $550 million) in the fourth quarter of 2008,'' said Keith Jackson, On Semiconductor's president and CEO, in a statement.

''Over the last several weeks, we have seen a dramatic appreciation of the U.S. dollar. This change in currency negatively impacts our revenues by approximately Rs.50.04 crore ($10 million) sequentially or approximately 2 per cent and is already embedded in our overall revenue guidance,'' he said. ''Backlog levels at the beginning of the fourth quarter of 2008 were down from backlog levels at the beginning of the third quarter of 2008 and represent over 95 per cent of our anticipated fourth quarter 2008 revenues. We expect that average selling prices for the fourth quarter of 2008 will be down approximately two per cent sequentially.''

-Mark LaPedus
EE Times

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