Atmel Corp. said it plans to buy part of Motorola Inc.'s smart card business.

Atmel, a semiconductor manufacturer seeking to expand its smart card specialty, said it signed a nonbinding memorandum of understanding to take over Motorola's Smart Information Transfer, or SIT, unit. The, deal, expected to close by midyear, would make Atmel one of the top three suppliers of integrated circuits designed specifically for plastic cards.

Motorola said the transaction-terms were not disclosed-will not diminish the commitment of its worldwide smart card solutions division, and it plans to use Atmel as a supplier.

The decision "stems from our strategy to focus on key businesses in target markets to improve" shareholder returns, said Billy Edwards, corporate vice president and director of strategic management and planning in Motorola's semiconductor products sector.

"Motorola's SIT business will provide a Atmel with a broad array of technologically advanced products, including advanced security features and outstanding design and engineering capabilities," said Atmel president and chief executive officer George Perlegos.

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