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Broadcom Buying AMD Unit For $192.8M

Advanced Micro Devices will sell its unit that makes chips for digital TV sets to Broadcom as part of a program to reduce debt and improve profitability.

SUNNYVALE, Calif. (AP) -- Advanced Micro Devices Inc. will sell its unit that makes chips for digital TV sets to fellow chip maker Broadcom Corp. for $192.8 million in cash, the companies announced Monday.

AMD is selling the unit as part of a program to reduce debt and improve profitability, said Dirk Meyer, president and chief executive. The company is a distant second to Intel Corp. in its main market of computer processors, and competition has intensified.

"AMD is executing a strategic plan to transform the company, becoming leaner and more focused while seeking to create a business model to deliver sustainable profitability," Meyer said.

The Sunnyvale, Calif.-based company's TV chips receive over-the-air broadcasts and process the signals to improve picture quality. They are used in flat-panel and rear-projection sets.

The unit "will become the core of Broadcom's DTV line of business," said Daniel Marotta, senior vice president and general manager of the Irvine, Calif.-based company's Broadband Communications Group.

The companies expect the deal to close by the end of the year.

The unit has about 530 employees. They will be invited to join Broadcom.

In premarket activity, AMD shares rose 13 cents, or 2.2 percent, to $5.94.

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