AMD sells its digital TV arm to Broadcom for US$193m

25 Aug 2008

AMD, one of the world’s largest microprocessor companies and Intel’s closest rival, has agreed to sell its digital television business to communications semiconductor giant Broadcom for US$192.8m, it emerged today.

The acquisition of AMD’s digital TV business is expected to enable Broadcom to scale up its own digital TV business and offer a product line that covers all segments of the DTV market, from low-end products to high-end interactive platforms.

The move comes just days after Intel unveiled its Media Processor CE 3100, previously code-named “Canmore”, which will help drive greater interactivity in the digital TV space.

Under the transaction, some 530 members of AMD’s dedicated digital TV team will join Broadcom.

AMD’s digital TV product line includes all Xilleon integrated processors as well as NXT receiver integrated circuits, the Theater 300 digital TV processor and a line of panel processors for advanced motion compensation, frame-rate conversion and scaling.

AMD chief executive Dirk Meyer said the move will allow AMD to transform itself into a leaner, more focused organisation with a business model that will sustain profitability.

“The sale of our DTV business is a key step in AMD’s transformation, helping to strengthen our balance sheet, lower our break-even point, and hone our focus in order to take full advantage of our position as a leader in both microprocessors and graphics technology,” Meyer said.

“Broadcom will be a great fit for our talented DTV employees and the DTV products they have created,” he added.

Broadcom senior vice-president Daniel Marotta said the acquisition will allow the company to grow its tier-one customer base and achieve leadership in what will be one of the early 21st Century’s most important markets.

“We believe our combined DTV team will be in an excellent position to grow and thrive in this burgeoning market by bringing best-in-class people, technology, solutions and support to our customers,” Marotta said.

Broadcom will pay AMD US$192.8m in cash in exchange for the digital TV assets. The board of directors of both companies have approved the deal, which will close in December.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years