14 DAY TRIAL // As mentioned in several of our previous articles, Advanced Micro is having a tough time managing its chip business and driving it to profitability, as competitor Intel is gaining ground in several market segments, leaving AMD to make do with the second spot. While the company's graphics chip business is finally turning in a profit with the release of the latest Radeon HD 4000-series graphics cards, other business segments are struggling to keep pace with the stiff competition. This is precisely why AMD has changed its business strategy, deciding to shake off some of its less profitable business segments.
On that note, AMD announced yesterday that it planned to sell its digital television business to Broadcom for a hefty $192.8m in cash. According to the company's recently appointed Chief Executive Officer Dirk Meyer, the transaction will help the company focus on its primary market of PC processors, where it needs to compete with leading chip maker Intel.
"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," said Meyer.
Senior Vice President and General Manager of Broadcom Daniel Marotta has said that AMD's TV business, which includes the company's Xilleon and Theater 300 integrated processor range, and NXT receiver integrated circuits, will become "the core of Broadcom's DTV line of business." AMD's TV units count for approximately 530 employees who will be asked to join Broadcom, once the acquisition is final. The transaction is expected to close during this year's Q4, with both board directors having to first approve the acquisition.
This appears to be just another step in Dirk Meyer's new business strategy to boost profits and turn AMD lucrative again. As noted above, the company intends to focus on its processor business, where it has lost considerable ground to the advantage of competitor Intel. On the other hand, last week, Intel announced its Media Processor CE 3100 processor, the first in a new family of purpose-built SoC processors for consumer electronics devices.