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Will AMD sell its consumer, handset lines?

Posted: 01 Aug 2008 ?? ?Print Version ?Bookmark and Share

Keywords:AMD consumer business? TV tuner? DTV? embedded solution?

Amid a possible plan to spin-off its manufacturing unit, Advanced Micro Devices Inc. may offload its consumer and handset chip lines from its ATI Technologies subsidiary, according to an analyst.

Several years ago, AMD acquired ATI, a supplier of graphics chips, TV tuners and high-definition video devices. It also supplies embedded solutions for handsets, DTV and other applications.

Broadcom is a likely buyer for some of ATI's products. "We believe that Broadcom is a likely candidate to acquire AMD's consumer TV business for about $250-$375 million as it has a comfort level and history with integrating former ATI products and management," said analyst Doug Freedman of American Technology Research Inc., in a report.

"The business includes DTV chips that are sold into major name brand digital TVs. We believe Sony and Samsung as well as HiSense (China) are all ATI customers," he said. "We also view the handset-based product line as available for sale; however, we are unable to identify a potential buyer given the limited customer base."

The possible moves follow a management shake-up at AMD, which has reported a string of losses and setbacks. Hector Ruiz has recently yielded his yielded his CEO post to Dirk Meyer.

"We believe AMD's executive level changes are a signal that restructuring actions will become more visible to investors," Freedman said. "The list of actions includes new faces in many high profile roles, the sale of non-core businesses including the ATI CE businesses (both handset and DTV product lines), and lastly, manufacturing base divestiture in an effort to share process technology development costs with a wider product/market base."

For some time, AMD has talked about its "asset-lite" plan, but it has failed to provide any details. The company is expected to spinout its manufacturing arm, turning the troubled firm into an IC design house.

- Mark LaPedus
EE Times

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