Kevin Rottinghaus - Cleveland Research

Okay.. Was there any -- I guess the question is on inventory. Is there any intentional inventory built there, as you now, I guess before the release today kind of put that asset, at least you're weighing your options with that asset?

Steve Laub

That's correct. With the way the process works, and I think we; if I had discussions with them, but the way process works with respect to anytime you are working with foreign countries, especially those in Europe, you have to make sure you follow a proper protocol, so, what we announced today is that we are pursuing or evaluating strategic alternatives in respect to that business, which is the proper of way to think about moving forward with respect to making changes there.

With respect to inventory builds there, there was no special action taken to build inventory there in that regard, in pursuit or in anticipation of this.

Kevin Rottinghaus - Cleveland Research

Great, I will jump back in queue. Thanks.

Operator

A next question is from the line of Hans Mosesmann for Raymond James.

Hans Mosesmann - Raymond James

Thank you. Good showing guys. If we look at the Atmel model, once the ASIC business goes away at some point in time, I would like to know how: do we assume gross margins and OpEx to trend longer term?

Steve Laub

So, one other thing that is unfortunate is that, I think you guys may recall from the discussions that we had in the mid part of 2008 when we announced a proposal to do a social play with respect to some of our labor force in France, we weren't able to talk at that time about any specifics regarding: will it happen if this versus that, and so, today we are in the same position. We can't talk about the implications of what may or may not happen without first getting there, a few steps need to be taken with the appropriate, with the proper, authorities in France.

Hans Mosesmann - Raymond James

Fair enough.

Steve Laub

It's a good question, but we really can’t provide any clarity with respect to that question today.

Hans Mosesmann - Raymond James

Okay, and then assuming that business is not there, is it reasonable to assume that about half of the ex-ASIC business would be microcontrollers and the half is going to be assortment of nonvolatile memory?

Steve Laub

We respect to the business composition, I think that you guys can easily discern that from the information we provide. I would say that what you have is, the remaining businesses that are not part of the ASIC business will be the microcontrollers, would be the automotive business and the nonvolatile memory.

Hans Mosesmann - Raymond James

Fair enough. Thank you very much.

Steve Laub

Thank you.

Operator

Our next question is from the line of Edwin Mok with Needham.

Edwin Mok - Needham

I think my question is for Steve or Stephen. The first question regarding the announcement. I would just want to get a clarification. Are you referring to just the French fab or you including the Colorado fab as well?

Steve Laub

No, what we are referring to, with respect to this, is the ASIC business units or the product lines that make up the business unit, which are the, in respect to their products, which are ASICs, which are also smartcard products, and also an aerospace business that reside there. In addition to that, we're also including related manufacturing assets of that business, which would consist of the fabrication facility in Rousset, France, as well as. There is a test or probing facility in East Kilbride in the UK and other miscellaneous facilities, but we are not including within that, the Colorado Spring facility.

Edwin Mok - Needham

Great. Just thank you for that clarification. And then, I guess, I have a two part question related to this announcement. First thing is, in that French fab will also been some auto product, you mentioned memory and maybe some other ARM MCU product. Are you guys taking step to start transferring those manufacturing to your Colorado Spring fab? That’s the first question?

And then, my second question is: can you give us some color in terms of gross margin? If you had exited that business parts also, including the sale, at what level gross margin do you think you're company can become; a rough range will be helpful? Thank you.

Steve Laub

So, very good questions. With respect to the first question, there had been some steps taken just from a standpoint of making sure that we're second sourcing high volume products. There is some steps already been taken with respect to that, with respect to parts are being built in that path and I was just back to that, we will continue to do that, because it's a right business decision ought for us to do that. But its other way too far ahead, we are doing that because, we are doing that anyway, and just because we feel that these products should be multiple sources.

With respect to what has fab again, I can't get into too much today, with respect to, what if this, what if that, what we do, clearly we are considering if this alternative, what should we do with respect to that and I’m hopeful to get some clarity on that, in the relatively near-term once we move forward along a few steps that, that are necessary that we do with respect to the authorities in France and so forth.

Edwin Mok - Needham

Okay. And then maybe I should ask it differently. Their ASIC business is it above corporate average, below coverage average or corporate average gross margin?

Stephen Cumming

It is below the corporate average gross margin, actually significantly.

Edwin Mok - Needham

Yeah, great. That's the call I'm looking for and then you typically gave a lot of backlog coverage at this point of the quarter. Can you give that number some color on that?

Stephen Cumming

So, the backlog coverage right now, for the quarter, is actually consistent with where it was last quarter, which was actually relatively consistent with where it is, it’s about in the mid-70s, is our backlog coverage, and our sense is that it's also moved from the mid-60s in the second quarter to mid-70s now, which is consistent of our experience. So, right now so far, it's moved consistent with our historical experience, if we ignore our last quarter.