SUNNYVALE, Calif.--In a move to narrow its focus on PC systems, Advanced Micro Devices Inc. here today announced plans to sell its Communications Group, which consists of the AMD's Communications Products and Network Products divisions.
AMD's Communications Products Division supplies ICs to telecommunication systems manufacturers, while the Network Products Division sells semiconductors to computer connectivity and data com applications.
Together, these two divisions generated about $70 million in revenues during the last quarter, said AMD. About 400 people are employed by these divisions in Sunnyvale and Austin, Tex.
"Going forward, our efforts will focus on providing communications-enabled solutions at the personal computer platform level, where we can leverage our chip set design and systems expertise and the AMD Athlon processor," said W.J. Sanders III, chairman and CEO of the Sunnyvale company. "The interests of our customers, shareholders and employees will be best served by our action."
Sanders added that AMD "will focus its energies and resources on convergence, based on a communications-centric PC platform. AMD will retain rights to the communications intellectual property essential to execution of our convergence strategy," he said.
AMD said it plans to complete the sale of the two divisions in the first half of 2000. The company has retained Donaldson, Lufkin, & Jenrette and Salomon Smith Barney to find a buyer for its Communications Group.
The sale of the AMD's Communications Group comes at a time when other major chip makers are increasing their efforts in telecom and data networking applications. Ironically, AMD's archrival in the PC microprocessor arena--Intel Corp.--has been moving further into the telecom and communications markets with a series of acquisitions, including its $2 billion purchase of Level One Communications Inc. (see March 4 story).
But AMD believes its best hope for growth will be to focus on opportunities in PC chip solutions and flash memories, according to Sanders. "The sale of the Communications Group will provide AMD additional resources to enhance growth prospects for our most promising opportunities in flash memory and platform solutions," said Sanders, referring to AMD's new Athlon processor.
AMD believes this is a good time to sell the Communications Group. "The explovie growth of the Internet and the enormous opportunities in telecommunications are creating huge new markets," Sanders said. "The AMD Communications Group has a rich intellectual property portfolio (including hundreds of patents), desirable products, and an experienced and skilled workforce to serve a broad range of communications applications," added the AMD chairman in his sales pitch for the group.