Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Can Atmel Corporation (ATML) Balance Revenue and Margin? QUALCOMM, Inc. (QCOM), Synaptics, Incorporated (SYNA)

Qualcomm, Inc. (NASDAQ:QCOM)The semiconductor industry hasn’t been to kind to Atmel Corporation (NASDAQ:ATML) lately. Due to increasing commoditization of its core touch controller business, shares have declined 40% over the past 12 months. But things are beginning to get interesting. Despite a sub-par fourth-quarter report, management seems more confident that potential that’s always been attached to this company will be realized in value. While commoditization concerns are valid, the valuation is attractive. And if management is to be believed, this stock can reach double-digits.

Can new products make the difference?
As noted, there’s always been a lot of potential with this company. This is despite the Street’s love affair with QUALCOMM, Inc. (NASDAQ:QCOM) and Broadcom Corporation (NASDAQ:BRCM) and their claim in the mobile devices market. Nevertheless, Atmel’s been steadily investing in its fast-growing touch-sensing technology business.

To that end, the company recently posted a 6% year-over-year growth in the microcontroller business, marking the fourth consecutive quarter of growth. This is despite what has been a brutal chip industry. That overall revenue arrived 10% lower was not much a concern. In fact, it was a 15% improvement when compared to the year-over-year growth of Q3. Plus, when adjusted for the sale of the serial flash business, the decline was only 8%.

However, Atmel Corporation (NASDAQ:ATML) continues to be a story about touch and a renewed focus on higher-growth business. To that end, Atmel recently unveiled several new products such as the maXTouch mXT450S aimed at generating higher margins. Likewise, the company’s latest maXTouch solutions have picked up new design wins and continue to gain momentum in “non-traditional” touch devices/products such as automotive applications.

Even more impressive, the new touch controllers have a strong focus on the end-user experience, including passive stylus support. And according to Stephen Cumming, Atmel’s CFO, these investments are likely to pay good dividends this year. In a recent interview with Reuters, Cumming seems more confident thanks to increased orders from smartphone and ultrabook customers like Samsung and Hewlett-Packard Company (NYSE:HPQ).

Is there a new focus?
In the phone interview, Cumming said:

Overall, 2013 is definitely going to shape up as a better year. I do feel that our maxTouch business will grow, our core microcontroller business would grow. Our other product lines should overall be doing better.

It’s hard to say what Cumming meant by his optimism for growth. If you recall, Atmel Corporation (NASDAQ:ATML) posted a 10% decline in revenue in the recent quarter.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.