Technology

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Wow! *This* is the power move in microcontroller arena! This is big news – Microchip, along with OnSemi, are attempting to buy Atmel, a news item of potential note to those makers who use microcontrollers (the popular Ardunio for example uses an Atmel AVR)… Thanks Jaime G!

Microchip Technology Incorporated (NASDAQ: MCHP) and ON Semiconductor Corporation (NASDAQ: ONNN) today announced that they have sent a proposal to the Board of Directors of Atmel Corporation (NASDAQ: ATML) to acquire Atmel for $5.00 per share in cash. The proposal, which is being led by Microchip, provides a premium of 52.4% to Atmel’s closing price of $3.28 on October 1, 2008, and values Atmel at $2.3 billion.

There’s more… some drama it seems.

We appreciate your having taken the time to meet with Steve Sanghi on September 5th to discuss Microchip’s potential acquisition of Atmel. However, we were deeply disappointed to learn subsequently that the Atmel Board of Directors appears unwilling to consider a transaction at this time under any circumstances. Given your apparent refusal to engage in transaction discussions, we are writing to you to formally propose an acquisition of Atmel for $5.00 per share in cash. The acquisition would be led by Microchip and financed in part by the sale of Atmel’s nonvolatile memory and RF and automotive businesses to ON Semiconductor.

Interesting questions to consider: Is Microchip hedging that Atmel’s products will start to take more market share or are they looking to kill the Atmel line altogether?

Someone phone this in to Cramer and see what he thinks!

24 thoughts on “Microchip along with OnSemi propose to acquire Atmel

  1. I use PICs for my projects, but I recognize that AVRs have a better architecture. Microchip ships free samples to hobbyists, no questions asked, so I’m inclined to think they’re good guys. Until there’s evidence to the contrary, I don’t believe that Microchip plans to kill the AVR line.

    But I’d love it if they started offering free samples of AVRs.

  2. I never liked PIC controllers very much, they always seemed very proprietary to me. Although their microcontrollers had cool features long before Atmel implemented them.

    But Atmels can be programmed with standard GCC and Atmel supports the avr-gcc’s development.
    I’d really hate microchip if they would destroy that, would be a great loss for the opensource-community.

  3. I think Microchip appears proprietary simply because the architecture stinks. The stack isn’t able to hold local variables, so compilers like gcc would be really hard to adapt to the PIC.

    Microchip hasn’t intentionally been hostile to open source (IMO) – they’re just stuck with an ancient, crappy architecture that effectively dissuades open source programmers.

    Acquiring Atmel might be their path away from from the PIC architecture, and that would be a good thing.

    Despite all that, I use the PIC18 and the free Microchip C18 compiler. I know the machine code it’s generating is disgusting, but it serves my needs. And the PIC chips are free! :-)

  4. The argument contains mostly complaints that atmel is not shutting down “underperforming” assets, it isnt making “high” profits from wall streets perspective and the economy stinks. This sounds like a company who plans to do a typical gut it while alive buyout.

    I hope atmel sticks to its guns.

  5. .. I will avoid all Microchip and ONsemi components whenever possible. I hate how companies can buy out SUPERIOR tech and bury it to kill competition. Don’t do it Atmel, please!!!

  6. People complain about how the architecture sucks, and they are more or less right for the 8-bit controllers. Microchip, to my naive eyes, has some pretty nice stuff going with it’s 16-bit controllers, it just seems like most project-types ignore or overlook them. Maybe microchip wants to make it’s 8-bit lineup less sucky.

    Then again, when you’ve been around forever, sometimes it pays to stick with bad, or necessary, design choices from 30 years ago. (I’ll say this as though it’s fact although I’m not sure it is) I mean, you can run 8008 machine code on a core 2 duo, after all…

  7. If Microchip were to acquire AVR and support it with their usual enthusiasm, that would be a very good thing…

    …but if they acquired AVR and killed it, we would not want to use PICs any more either, so what would we be left with? TI MSP430 maybe?

    More generally, beyond AVR and PIC, what is everybody’s third-favorite low-end microcontroller?

    What Microchip has always understood is that “there is always room at the bottom.” That is, cheap low-performance micros in old-fashioned DIP packages will remain in demand for a very long time!

  8. Atmel is creating chips that directly compete with Microchip. They’re more capable and less expensive.

    I hope Atmel makes a fight of it and has a very toxic poison pill provision.

    Microchip is too proprietary and I’ve not seen them be too friendly to the free software folk who want to use the same tools you can use on Atmel.

    If not for Atmel there wouldn’t have this wave of creativity with microcontrollers. TI has been hostile to free software’s efforts, one of their dev kits is gathering dust because of it.

    I’ll never pick the parts of any company if I can’t program it with free software unless forced to do so. I have three dev kits gathering dust for that reason. I found Atmel solutions so they get ignored.

  9. Atmel is creating chips that directly compete with Microchip. They’re more capable and less expensive.

    I hope Atmel makes a fight of it and has a very toxic poison pill provision.

    Microchip is too proprietary and I’ve not seen them be too friendly to the free software folk who want to use the same tools you can use on Atmel.

    If not for Atmel there wouldn’t have this wave of creativity with microcontrollers.

    I’ll never pick the parts of any company if I can’t program it with free software unless forced to do so. I have three dev kits gathering dust for that reason. TI also has been hostile to free software’s efforts, one of their dev kits is gathering dust because of it. I found Atmel solutions so they get ignored.

  10. The gist of the letter published on the “Microchip” website is “You guys don’t know what you’re doing and the economy is imploding so you’d better sell out while we’re feeling generous”.

    This is always a red flag — if the business is so bad and so poorly run, why buy it rathr than letting it die on its own and picking up the assets at firesale prices?

    More likely they’re trying to quash any competition, and unfortunately the tinkerers (who at the end of the day are a very small part of the overall market volume) will be left out in the cold.

    However the devil’s advocate position is that if the AVR line were gutted, it might force the open-source community to move on to something else and potentially more interesting.

    In the meantime, I’ll side with @Jack above (and keep an eye on this in case I have to buy a box of the things as AVR slips into the clutches of tassel-loafered buffoons and founders).

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