Advanced Micro Devices has agreed to sell its struggling handset division to Qualcomm for $65 million, according to the chip makers. AMD plans to sell the handset division that includes graphics, multimedia and other technology. AMD inherited the ATI's handset division in 2006 and the division had underperformed since then and the losses have had a significant impact on AMD's bottom line. AMD also sold its digital television division to Broadcom in 2008.
Micro Devices has agreed to sell its struggling handset division to Qualcomm
for $65 million, which should help AMD as the chip maker looks to strengthen
its financial position and concentrate on its core business of processors,
graphics and chip sets.
AMD and Qualcomm announced the agreement Jan. 20. The
two companies did not indicate when they would finalize the deal.
The agreement means that Qualcomm will not only
acquire AMD's handset division, but the company also inherits the graphics,
multimedia technology and other intellectual property from the business. With
the deal complete, Qualcomm plans to use that technology and intellectual
property to develop new types of 2D (two-dimensional) and 3D
(three-dimensional) graphics technologies for handset devices and cell phones
as well as enhanced audio, video and display capabilities.
Qualcomm is also extending job offers to some of the
employees that worked within AMD's handset division.
"This acquisition of assets from AMD's handheld
business brings us strong multimedia technologies, including graphics cores
that we have been licensing for several years," Steve Mollenkopf, executive
vice president of Qualcomm and president of Qualcomm CDMA Technologies, said in
AMD originally inherited the handset business when
it bought graphics maker ATI in 2006 for $5.6 billion. The handset division was
original part of ATI's consumer electronics business and that division has
underperformed for the last two years.
While the ATI buy was seen as a way for AMD to
better compete with Intel and offer its own line of graphics and chip sets for
desktops and notebooks as well as server systems, AMD has struggled with the
cost of the acquisition. Last
week, when AMD announced that it would eliminate 1,100 jobs, the company
also announced that it plans to take a $622 million impairment charge related
to the 2006 acquisition of ATI.
In 2008, AMD
announced it would sell off its digital television business, which was also part
of ATI's consumer electronics division, to Broadcom for $141.5 million.
With the handset division now sold off, AMD plans to concentrate more on its
core business of microprocessors, graphics and chip sets.
also plans to spin off its manufacturing business into a new company tentatively
called "The Foundry Company." This is also expected to help AMD shore up its
finances and allow the company to focus on those core businesses. That deal is
expected to close sometime in the first quarter of this year.