Semiconductors

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AMD Clears the Deck

06/13/06 - 03:51 PM EDT

Alexei Oreskovic

Lately, AMD has been shedding product lines that aren't based on the x86 architecture. Last year, AMD spun off its flash-memory division, dubbed SpansionSPSN, in a public offering.

AMD's latest move has made it clear that it is refocusing 100% of its resources to take on Intel in the market for x86-based microprocessors, says Tony Massimini, the chief of technology at industry research firm Semico Research.

"And Alchemy doesn't fit that at all," says Massimini.

Of course, the market for the consumer-electronics devices that Alchemy chips are geared for is considered by many to present greater opportunities for growth in the coming years than the more mature market for PCs.

By investing in RMI, AMD appears to be attempting to keep a foot planted in the growing consumer-electronics business, while focusing day-to-day operations on its core x86 business.

The deal is part of a broader strategic relationship in which AMD and RMI will cooperate in a number of different areas, including AMD's recently announced Torrenza platform, which allows third parties to develop co-processors to run alongside AMD's chips.

Shares of AMD recently fell 3.5%, or 90 cents, to $24.78.




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