Advanced Micro Devices Inc. (AMD) has agreed to sell its digital-television business to Broadcom Corp. for $192.8 million as the struggling chipmaker moves to streamline itself as it battle chip giant Intel Corp. The deal is expected to close in the fourth quarter of the current fiscal.

The acquisition of AMD's DTV business is expected to enable Broadcom to immediately scale its DTV business, and, in conjunction with its existing products, to offer a complete product line that covers all segments of the DTV market ranging from low-end value and mid-range quality to high-end interactive platforms and panel processors.

It is also expected to expand Broadcom's existing tier one customer base, which includes the top DTV brands worldwide. This deal aims to enhance and strengthen Broadcom's innovative DTV system solution offerings while delivering the scale and focus needed to forge a market-leading DTV business.

Daniel Marotta, Senior Vice President & General Manager of Broadcom's Broadband Communications Group, said, ''The acquisition of AMD's DTV business, which will become the core of Broadcom's DTV line of business, will enable us to significantly scale and accelerate the completion of our digital TV product portfolio while also expanding our tier one customer base and positions us to achieve leadership and long-term growth in this important market segment.''

In connection with the transaction, approximately 530 members of AMD's dedicated DTV team, in addition to certain employees directly supporting this team, located in six primary design centers around the world, will be invited to join Broadcom.

Marotta said that he believed ''the combined DTV team will be in an excellent position to grow and thrive in this burgeoning market by bringing best-in-class people, technology, solutions and support to our customers."

AMD's DTV product line includes all Xilleon integrated DTV processors and complete turnkey reference designs, as well as NXT receiver ICs, the Theater(TM) 300 DTV processor, and a line of panel processors that perform advanced motion compensation, frame rate conversion and scaling.

Meyer became CEO of AMD last week with a formidable challenge of returning the company to profitability after seven consecutive quarterly losses and transforming the way computers process graphics and information.

"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 sale of our DTV business is a key step in AMD's transformation, helping to strengthen our balance sheet, lower our breakeven point, and hone our focus in order to take full advantage of our position as a leader in both microprocessors and graphics technology. Broadcom will be a great fit for our talented DTV employees and the DTV products they have created," he added. (See: Ruiz steps down as AMD chief executive)

The company's cost structure has been among the biggest worries for investors, causing AMD to burn through its cash. Reserves as of 30 June were down nearly 10 per cent during the second quarter and dropped 17 per cent in the first half of the year.

AMD's stock hit a six-year low last month and is down 52 per cent the past year. It closed Friday at $5.81 and there was no pre-market trading for AMD or Broadcom, which finished at $27.42.