2008 Customer Satisfaction Survey Results

In 2008 as part of Atmel's bi-annual customer satisfaction survey process, we gathered and analyzed customers' perceptions on key aspects of Atmel's performance. We have outlined the findings and derived actions in order to strive for excellence in every aspect of our business operations. Thanks to the outstanding response rate, our customer survey approach has become more and more accurate and reliable and thus, a privileged source of information to drive our continuous improvement system.

Product Technology
Customer feedback confirms that we should continue our strong focus on technology. By doing so we will support our customer base in the development of value added products. Our goal is to be a leader in innovative technology for microcontroller-based solutions. Focus areas include high system performance and low power consumption in developing a complete application solution.

In 2008 we launched Atmel QTouch which is a leading capacitive touch interface technology for buttons, sliders, wheels and screens. Atmel also developed a complete software library to enable our customers to create solutions. Atmel also acquired a complete offering of ZigBee software to enable a full range of wireless solutions.

With the focus on systems and system performance, Atmel developed and launched the AVR XMEGA microcontroller family. XMEGA has superior performance to any competitor in the market today and utilizes the latest picoPower™ technology for lowest possible power consumption. With built in event systems, DMA controller and advanced timer structures, XMEGA performance is revolutionary and will give developers extreme freedom when designing new products.

As many customers also use the ARM architecture, we have developed many new Smart Arm Products (SAM) in 2008. We have licenses to the most important ARM architectures and will increase our effort to release more ARM-based products to the market in 2009 and 2010.

Atmel also developed several new products within the automotive segment as well as memory and secure memories. Moving forward we will establish improved application guidance to help customers use more Atmel parts in their products and thereby speed up the design phase.

We will continue to improve our product sampling procedures as we see it extremely important for customers to get requested parts in an even timelier manner.

Atmel also wants to apologize to all customers that experienced delays in receiving development tools in 2008 and we realize that not all products have been available. Due to the continued increase in development tool demand we moved development tool production to an established third party manufacturer. In Q2, 2009 we will be fully up and running and will be able to provide significantly reduced lead times.

Quality and Reliability
The 2008 survey indicated that 88% of the respondents were satisfied with Quality & Reliability - the highest rate ever received. This valued feedback from our customers has further reinforced Atmel's commitment to its continuous improvement philosophy, resulting in the following activities in 2009:

• Enhancing our internal Customer Specification Review process to provide responses in a time frame that exceeds customer expectations
• Implementing the Customer Satisfaction Program with dedicated accounts. Deploying focal point quality personnel to service key customers & identifying best practices
• Upgrading the coordination of Atmel's Change Management processes into a unified methodology that strives to prevent unintended consequences from changes and aligns to customer expectations and requirements
• Launching our Global Automotive Quality Improvement Program
• Developing a Customer Quality Strategic Center for Asia. Establishing a Lab for Quality/Reliability Testing and Failure Analysis at Calamba City, Philippines (ACP). The Asia Centre of Excellence (ACOE) will start supporting customers in Q4, 2009.
• Deploying a CIP (Continuous Improvement Process) dedicated to eliminate repeat failure modes.
• Strengthening the New Product Introduction process, in particular qualification rules and methodologies.
• Improving customer complaint responsiveness and report content.

The 2009 initiatives are underpinned by a centralized quality & reliability organization with dedicated functional responsibilities thus ensuring timely resolution of issues and focus on improvement initiatives.

Delivery and Logistics
On-Time-Delivery performance continues to be a key focus for 2009. Our sales and operation planning model is deployed to over half the company, bringing benefits to Atmel's on time delivery (OTD), early warning processes, and the time to schedule new orders. OTD is currently at 92% against our corporate goal of 95% with proactive root cause investigation and corrective action processes to drive continuous improvement. As we complete the implementation phase of our initiative, future phases will include an automated available to promise (ATP) module to give real-time feedback to our Customer base.

Service and Support
The survey results reflected a growing positive perception from our customers in service and support compared to previous results but we are not stopping there. Atmel has invested and will continue to invest in the areas that will have a direct positive impact on customer service and support. We are investing in better systems, re-engineering our processes and spending more on technical sales support to further Atmel's status as a world-class semiconductor company. The efforts we are doing today will have a significant impact on our service and support for our customers tomorrow. There are still opportunities for improvement and we appreciate your candid feedback. These areas are known to us and we will improve and generate positive results.

Thank you for your feedback and we look forward to continue to service and support you in the future.