MICROCHIP manufacturer Atmel has announced plans to sell off its North-East plant - putting about 800 jobs under threat.

US-owned Atmel has put its site in Silverlink, North Tyneside, on the market as part of restructuring plans to save tens of millions of pounds in the next two years.

Some of the 800 workers have expressed concern that the former Siemens plant could face closure if a buyer is not found before the end of 2007.

However, Atmel yesterday said it was confident that the business would be sold without any disruption to the workforce.

Billy Gibb, HR and business development director, said: "It is for sale, but there are no discussions regarding closure. The management is confident we will find a buyer.

"It is a state-of-the-art manufacturing facility and we are confident we can find someone to take it on without disruption to our employees and customers.

"We plan to operate a retention and performance incentive package because we do not want to lose people."

Atmel hopes to save up to £30m a year by selling two of its European plants - Silverlink and another in Heilbronn, Germany.

The sales form part of plans to save about £50m a year by 2008, including a ten per cent cut in its non-manufacturing workforce in the US.

The group's president and chief executive, Steven Laub, said in a statement: "While this decision was difficult given the company's many dedicated employees, these actions are essential to better position Atmel to compete and drive value for our shareholders."

Regional development agency One NorthEast yesterday pledged its support to the future of the Silverlink plant.

Chief executive Alan Clarke said: "We will work with our public sector partners to ensure everything possible is done to support local management and the company to help achieve a successful outcome.

"Atmel is a key contributor to the local and national economies and provides quality employment and prosperity to many hundreds of workers and their families.

"One NorthEast has a close working relationship with Atmel local management and we will be meeting with them to learn of their future plans and timescales."

In 1998, about 1,100 jobs were lost when Siemens closed the North Tyneside factory and put it up for sale.

Atmel, which makes microchips for communications, consumer and computing applications, including smart cards, mobile phones and DVD players, bought the site in 2000 for about £74m. At the time, it pledged to create up to 1,500 jobs.

Mike Pitkethly, chief executive of Cenamps, a not-for-profit company that aims to stimulate innovation in the region, said: "Cenamps is hopeful that a buyer will be found for the Atmel plant.

"North-East England has many strengths in micro and nano technologies - both in industry and academia.

"These strengths, particularly in the region's universities, will hopefully attract new investors.

"Recent investments in the region, such as the £10m plastic electronics centre, PETeC, in County Durham, are targeted at securing new businesses in the region's micro and nanotechnologies industry."