Advanced Micro Devices has reached a deal to sell its struggling handset division, the one it inherited as part of the 2006 acquisition of ATI Technologies, to Qualcomm for $65 million, a move that should improve the chipmaker's bottom line. According to an e-Week report, Qualcomm also snags intellectual property from, including the graphics and multimedia technology that came from ATI.
The report notes that Qualcomm has plans to use those assets to start work on new two- and three-dimensional graphics technologies for mobile devices,at technology and intellectual property to develop new types of 2D (two-dimensional) and 3D (three-dimensional) graphics technologies, as well as enhanced audio and video capabailities, for mobile devices. In a statement, Qualcomm executive VP Steve Mollenkopf said, "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."
The move helps AMD work on improving its bottom line. Last week, the company said it would layoff 1,100 people, suspend its 401(k) match for employees and institute salary cuts for executives and managers. Last year, the company said it plans to spin off its manufacturing business into a joint venture largely funded by Abu Dhabi investment companies, a move that would bring in the billions of dollars it was struggling to find to construct state-of-the-art chip plants needed to build the smaller, faster and more energy-efficient chips that compete with Intel’s - not that Intel's outlook is any rosier. Intel's fourth quarter results for horrible, considered one of the worst since 2000.
AMD also said last week that it also plans to take a $622 million goodwill impairment charge related to the ATI acquisition, as well as a $62 million charge related to the purchase.
Shares of AMD were down more than 10 percent today, hovering around the $2 mark. Shares of Qualcomm were down about 4 percent to $34.52 in regular trading.