The agreement also includes the transfer of the facility's employees and a three-year supply agreement, Atmel said. The company plans to take charges of up to $10 million as the result of the sale.

Tejas Silicon Holdings Ltd. has agreed to acquire the Heilbronn, Germany fab operation, including equipment, but will lease the facility and license fab process technology from Atmel. About 300 Atmel employees associated with fab operations and other support functions will become a part of Tejas Silicon, Atmel said.

Atmel and Tejas Silicon will also enter into a supply agreement whereby Atmel will continue to procure products from the Heilbronn fab over a three-year period, Atmel said. During this time, production will also be redeployed to Atmel's other manufacturing facilities and external foundries, the company said.

Atmel said it expects to record charges of about $5 million to $10 million in the third and fourth quarter of 2008 due to impairment and a loss on the sale of the equipment.

Atmel announced in 2006 it would sell the Heilbronn fab as part of a restructuring that also included the sale of the company's fabs in North Tyneside, U.K. and Irving, Texas.

By: DocMemory
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