AMD To Purchase IA Unit Of National Semiconductor

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Advanced Micro Devices said last week it plansto acquire the assets of National Semiconductor's Information Appliance business 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.

Pompa: National has an 80 percent share of the thin-client processor space.

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 the thin-client, smart-display and set-top-box markets, said Phil Pompa, vice president of marketing at AMD.

In the thin-client space, National Semiconductor had an 80 percent share of the processor market, 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, Pompa said. "Because we are a microprocessor and a Flash memory company, this fits well 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 the company can leverage for developing microprocessors, Pompa said. It also gets a new design center in Longmont, Colo.

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.

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," said Hector Ruiz, president and CEO of AMD, in a statement.

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.

EDWARD F. MOLTZEN contributed to this story.

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