AMD To Acquire National Semiconductor's Information Appliance Unit

The two companies have entered into an agreement under which AMD will acquire intellectual property and assets related mainly to National Semiconductor's Geode family of microprocessor products. Under the deal, about 132 employees will move from Santa Clara, Calif.-based National Semiconductor to Sunnyvale, Calif.-based AMD, according to executives at both companies. Financial terms of the deal, expected to close this month, were not released.

AMD plans to offer the Geode product line, which is compatible with its x86 architecture in thin-client, smart-display and set-top-box markets, said Phil Pompa, vice president of marketing at the company. In the thin-client space, National Semiconductor had an 80 percent share of the processor market, including a deal with market-leader Wyse Technology, San Jose, Calif., he said.

Because National Semiconductor is mainly focused on the analog space, the Geode business unit, which was originally acquired from Cyrix, is a much better fit with AMD, said Pompa. "Because we are a microprocessor and a Flash memory company, this fits will with our business overall," he said.

Short-term benefits to AMD from the acquisition include an existing revenue stream and customer base, as well as an architecture AMD can leverage for developing microprocessors, Pompa said. The company also gets a new design center in Longmont, Colo., to complement its existing design centers in Austin, Texas, and Dresden, Germany.

Over the long term, the Geode group will allow AMD to broaden its market reach without needing to set up a new design team, Pompa said.

Hector Ruiz, president and CEO of AMD, said in a statement that the acquisition will make AMD "the only company with the assets, dedicated resources and strategic vision to deliver a common, industry-standard architecture from embedded applications to mobile, desktop and servers."

Brian Halla, National Semiconductor's chairman, president and CEO, said in the statement that the deal makes sense for both companies. "This allows National to focus on growing our core analog business and improving our returns," he said. "At the same time, AMD will be able to leverage the Geode technology through their existing manufacturing and marketing infrastructure."