In May of this year Advanced Micro Devices (AMD), stated its intentions to exit what it described in Q1 financial statement as “non-core” businesses by the end of Q3’08. Today, Broadcom (BRCM) announced a deal to acquire AMD’s digital TV (DTV) business, which includes digital TV chips that are sold into major name brand digital TVs, for $192.8 million in cash.
The acquisition of AMD’s DTV business is expected to enable Broadcom to immediately scale its DTV business, and, in conjunction with its existing products, to offer a complete product line that covers all segments of the DTV market ranging from low-end value and mid-range quality to high-end interactive platforms and panel processors.
Approximately 530 members of AMD’s DTV team, in addition to certain employees directly supporting this team will be invited to join Broadcom.
Senior Vice President & General Manager of Broadcom’s Broadband Communications Group Daniel Marotta, said:
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.
AMD said the selling of the unit is intended to strengthen the co’s balance sheet and lower its break-even point. Several weeks ago AMD announced a management shakeup that saw Hector Ruiz yield the position of CEO to Dirk Meyer after the co’s announcement of a massive $1.2 billion loss during the second quarter of current fiscal year.
The companies expect the deal to close by the end of ’08.