Dialog shares rise after losing bid for Atmel
(Adds trader comment, data about chip market, background; refiled to correct punctuation)
* Dialog says will not raise its offer for U.S. peer Atmel
* Dialog will receive $137.3 mln breakup fee
* Shares rise as much as 9 pct, far below pre-deal levels
* Dialog could become target itself - trader
FRANKFURT, Jan 15 (Reuters) - Shares in Dialog Semiconductor Plc rose as much as 9 percent on Friday after it said it would not enter a bidding war for U.S. chipmaker Atmel Corp .
Earlier this week Atmel said it considered rival suitor Microchip Technology Inc's $3.42 billion cash-and-stock proposal superior to an agreed offer from Dialog.
As a result Dialog will receive a break-up fee of $137.3 million.
By 0845 GMT Dialog shares were up 3 percent at 27.78 euros after rising as much as 9 percent. The shares were at the top of the German technology index and outperforming the broader market, which was flat.
However, the share price is still well below levels prevailing before it announced the deal with Atmel in September, having dropped more than 40 percent since then.
The company last month warned its results would suffer due to a slower smartphone market, which is expected to continue this year.
Dialog is heavily dependent on Apple Inc and Samsung Electronics, which use its chips in their smartphones.
An earlier attempt to diversify and expand by merging with Austria's AMS also failed in July 2014.
A Frankfurt-based trader said Dialog could become a takeover target now. The global chip sector is in full consolidation mode as chip makers are looking for scale to cuts costs, meet demand for cheaper chips and diversify their portfolios.
Last year, deals worth more than $130 billion were announced.
Worldwide semiconductor sales fell 1.9 percent to $333.7 billion in 2015, according to research firm Gartner.
But the data showed that combined revenues of the global top-25 chipmakers rose 0.2 percent and that the top-25 companies accounted for almost two-third of total sales.
(Reporting by Harro ten Wolde; Editing by Christoph Steitz)
