AMD slims down, sells digital TV business to Broadcom

Broadcom said Monday that it has acquired AMD's digital TV business for $192.8 million in cash in a move that's a win-win for both parties.

Broadcom said Monday that it has acquired AMD's digital TV business for $192.8 million in cash in a move that's a win-win for both parties.

For AMD, the sale offloads a business that wasn't a priority and allows the chipmaker to save capital expenses while raising some cash. For Broadcom, the purchase makes it a player and allows it to scale its efforts better. In a statement, Broadcom said AMD's DTV business will give it a complete lineup from "low-end value and mid-range quality to high-end interactive platforms and panel processors." Broadcom also gets access to a larger customer base.

As part of the deal, Broadcom will invite 530 employees of AMD's DTV business to join the company. AMD has six design centers around the world. AMD’s DTV product line includes all Xilleon integrated DTV processors and reference designs, NXT receiver ICs, the Theater 300 DTV semiconductor and panel chips.

AMD CEO Dirk Meyer sums up the deal, which is expected to close in the fourth quarter, for the company:

“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. The sale of our DTV business is a key step in AMD’s transformation, helping to strengthen our balance sheet, lower our breakeven point, and hone our focus in order to take full advantage of our position as a leader in both microprocessors and graphics technology."

The AMD is likely to be well received as Meyer revamps the company.

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