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7 July 2020

Qualcomm buys a big chunk of AMD’s handset division for $65 million, AMD all set to hunker down

amd logo Qualcomm buys a big chunk of AMDs handset division for $65 million, AMD all set to hunker downIn a win-win deal for Qualcomm and AMD, the latter has sold “certain graphics and multimedia technology assets, intellectual property and resources that were formerly the basis of AMD’s handheld business” to Qualcomm for $65 million.

Not only will Qualcomm own the multimedia technologies and graphics cores it has been licensing from AMD for years now, it enables AMD to rid itself of the majority of its failed ATI acquisition, raise some much needed cash, and focus on its core products, including x86 computing technologies and high-end graphics.

Qualcomm has extended job offers to some of AMD’s handheld design teams that were focusing on 2D and 3D graphics, audio/video, display and architecture and will eventually directly integrate the new technologies into its system-on-chip products.

While the details of exactly what Qualcomm bought are vague, AMD was quick to point out in an email to CNET that the deal did “not include AMD’s Imageon graphics and multimedia chips for handheld devices”–which includes the new Athlon chips.  The company said that it would honor all existing customer commitments with the Imageon line, but there are no additional products on the roadmap.

amd imageo chip Qualcomm buys a big chunk of AMDs handset division for $65 million, AMD all set to hunker down

Imageon was one of ATI’s graphics lines that AMD purchased in 2006.

It’s fairly obvious that AMD is buckling down and focusing on its core strengths, abandoning the portable device market entirely aside from mid-range notebooks that will run on the company’s new Yukon and Congo processors.  The company has stated repeatedly that it’s not interested in the netbook market where Intel’s Atom processor is king.  But as GigaOm points out, there is still money to be made by AMD in the portable device market as more and more devices rely on third party servers for data storage (so-called cloud computing).  AMD often powers these servers with its high-end processors which also contribute much higher profit margins.

Profit margins.  Something AMD sorely needs.  The company recently announced it was cutting 1, 100 jobs and taking another $622 million charge as the result of its 2006 ATI acquisition.  In total it has written off $3.2 billion of the acquisition including this sale and the sale of its DTV assets to Broadcom last year.  Good riddance I must say.

The company is, however, in a bit of a catch-22 now.  It really has no choice but to hunker down and develop out its core assets, but buckling down also means placing all of its eggs in one basket.  It’s a risky bet, but I think it’s a smart one.

Read the official announcement.

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