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1/20/2009
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Qualcomm Buys AMD's Mobile Graphics Division

The $65 million cash deal enables struggling Advanced Micro Devices to become leaner and focus on areas of profitability.

In a move that could increase its presence in the mobile market, Qualcomm has acquired graphics and multimedia assets from Advanced Micro Devices' mobile division for $65 million.

The cash deal has already received regulatory approval, and it involves intellectual property, assets, and personnel from AMD Handheld. Qualcomm said the deal will eventually lead to significantly improved 2-D and 3-D performances once the technology is integrated into its hardware. The deal does not include AMD's Imageon line, which is already in cell phones from HTC, LG, Motorola, and others.

"This acquisition of assets from AMD's handheld business brings us strong multimedia technologies, including graphics cores that we have been licensing for several years," said Steve Mollenkopf, executive VP of Qualcomm, in a statement. "Bringing this technology in-house creates even greater synergy as we seamlessly integrate the best-in-class multimedia performance AMD offers into our system-on-chip products."

The move was expected, as AMD has said it will cut costs and focus on areas of profitability. Last year, AMD sold its digital television division to Broadcom for $192.8 million.

"With the sale of these handheld technology assets and resources to Qualcomm, we are better able to focus on our core business and leverage our unique position as a leader in both x86 computing and high-end graphics," AMD CFO Robert Rivet said in a statement.

The company is struggling with competition from the likes of Intel, and the global economic slowdown has hurt demand. The microprocessor maker has already said it would cut about 9% of its workforce, reduce executive pay, and suspend contributions to employee retirement accounts.

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