Atmel considers selling itself off

self-flagellationThe maker of microcontrollers, Atmel, is considering flogging itself off as the chip industry continues to consolidate.

Mid-sized semiconductor makers are being swallowed up by bigger semiconductor players wanting to enter the Internet of Things and car market.

Atmel, which has a market capitalisation of around $4 billion, is working with investment bank Qatalyst Partners on a sale process, two of the people said. There is no certainty that Atmel will decide to sell itself, the people added.

Atmel is an obvious target for the Internet of Things technology. It supplies components for “wearables” products, including smart watches and fitness bands.

Atmel’s long-serving chief executive officer, Steve Laub, said in May that he would retire at the end of August, a move that may have contributed to the move.

In the first quarter of 2015, Atmel’s adjusted net profit fell to $45.1 million compared with $49.2 million a year earlier. It is forecasting revenue between $310 million and $326 million in the second quarter and gross margins of about 48 percent. It generated annual revenue of $1.41 billion last year.

Some of the bigger companies want to sell analogue components, such as sensors, or power management parts along with microcontrollers. It is not the first time the company has been the target for a takeover, Chipmakers ON and Microchip Technology launched a joint hostile bid for the company in 2008. In the end they gave up.

In recent weeks Avago bought Broadcom and Intel wrote a cheque for Altera.