I have no idea what the PPS will do short term-depends on overall market, but these were the results and guidance from STM - they compete in the same markets as Atmel.

3Q Results+14%
On a sequential basis, all market segments posted growth, with Computer increasing by 21%, Automotive by 18%, Telecom by 14%, Consumer by 11% and Industrial by 9%

NVM-EEPROMS +16% = $80.5M
RF-AUTO +18% = $41.8M
ASIC +9% = $85.2M
MICROC +14% = $115.8M

TOTAL +14% = $323.3M

The Gross margin driver for Atmel is Fab utilization. For Q2 it was in the low 50's. At the 2Q conference call it forecasted to be in the low 60's for Q3.

A gross Margin Increase to 35% from 32.3% last quarter plus revenue of $320M in Q3 would be enough to allow Atmel to make 1 to 2 cents in earnings.

If they guide similar to STM then I would expect revenue of $350M in Q4 and earnings of 4 to 5 cents.

The big question is.....have they found a buyer/strategic partner or whatever for the ASIC division and if so what will be the arrangement? A straight sale would be a huge boost for stock. They said they would complete whatever by the end of the year. They hit their deadlines on N.Tynside and on the Germany RF fab.

Note: the Asic division has the lowest gross margins of all 4 business groups. They do have some aerospace business that is high margin but it is small potatoes compared to the smart card business.

4Q STM outlook was +9%
"Turning to our outlook, we believed the final three-months of the year are shaping up to be a stronger than seasonal quarter for ST. Based upon our backlog and visibility, we expect IMS to grow faster than the company average, boosted by strong growth microcontrollers, Smartcard, and across all families in advanced analog power and MEMS."

GLTA