14 DAY TRIAL // Advanced Micro Devices announced a while ago its plans to sell the "non core" businesses, and the latest news indicates that this may include selling the consumer electronics TV business unit the company acquired back in 2006 together with ATI Technologies. According to an analyst, the possible buyer of the company's unit might be Broadcom Corp.
AMD talked a lot lately about its plans to turn the company to profitability, though it gave no specific details to journalists. Still, it does not look to be doing very well, and the losses and setbacks in the second quarter of the year brought a management change to the company. Earlier this month, President and Chief Operating Officer Dirk Meyer replaced CEO Hector Ruiz.
''We believe AMD's executive level changes are a signal that restructuring actions will become more visible to investors,'' said analyst Freedman. ''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 Digital TV product lines), and lastly, manufacturing base divestiture in an effort to share process technology development costs with a wider product/market base.''
After taking over ATI Technologies' businesses, revenues went down by 40 percent on a year-over-year basis in the consumer electronics units, including chips used for digital TV-sets or mobile phones. AMD is believed to be on its way to becoming an IC design house, as its announced ''asset-lite'' plan is rumored to include a spin-out of its manufacturing arm.
Broadcom may be interested in buying 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," stated analyst Doug Freedman of American Technology Research in a report, says EETimes web-site.
"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. 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," said Mr. Freedman.