AMD, the chief rival to Intel in the computer semiconductor market, said in a statement it would retain a 10 percent stake in the unit and will have a warrant to buy about another 10 percent.
AMD also will provide certain services to the new company under a multi-year contract, it said.
The unit produces integrated circuits for telecommunications and Internet access applications. Its 1999 revenues were $168m and first-quarter 2000 revenues were $59.5m.
Based in Austin, Texas, it has about 160 employees.