Aug 25, 2008 (07:08 AM EDT)
AMD Selling Digital TV Group To Broadcom For $193 Million

Read the Original Article at InformationWeek

Advanced Micro Devices has agreed to sell its digital TV operation to Broadcom in a mutually advantageous move -- AMD gets $192.8 million and Broadcom gets to flesh out its growing DTV product line.

Announced Monday, the acquisition also enables AMD to unload a piece of its disastrous $5.4 billion acquisition of ATI as it concentrates on slimming down its manufacturing operations in particular.

The acquisition of the DTV unit wasn't unexpected. Nearly a month ago, an analyst at American Technology Research had suggested Broadcom could acquire the operation from cash-needy AMD.

"AMD is executing a strategic plan to transform the company, becoming leaner and more focused while seeking to create a business model to deliver sustainable profitability," said Dirk Meyer, AMD's president and chief executive officer, in a statement. "The sale of our DTV business is a key step in AMD's transformation, helping to strengthen our balance sheet, lower our break even point, and hone our focus in order to take full advantage of our position as a leader in both microprocessors and graphics technology."

Broadcom said the DTV acquisition, which includes ATI-AMD integrated Xilleon DTV processors, will enable it to immediately scale its DTV business from low-end to mid-range to high-end interactive platforms and panel processors. The product transfer also includes complete turnkey reference designs, NXT receiver ICs, the Theater 300 DTV processor, and a family of panel processors.

"The acquisition of AMD's DTV business, which will become the core of Broadcom's DTV line of business, will enable us to significantly scale and accelerate the completion of our digital TV product portfolio while also expanding our tier one customer base and positions us to achieve leadership and long-term growth in this important market segment," said Daniel Marotta, senior VP of Broadcom's broadband communications group, in a statement.

After seven consecutive quarterly losses, AMD has launched a new campaign to slim its operations. Some 530 members of AMD's dedicated DTV team, as well as some support employees, are to make the move to Broadcom. The employees are located at six design centers around the globe and will be invited to join Broadcom, the firm said.

Noting that the board of directors of both companies have already approved of the acquisition, the firms said the deal is expected to be accomplished by the end of the year.