Wednesday, July 11, 2007

AMD invests in a downfalling Chip manufacturer, Transmeta

Advanced Micro Devices (AMD),micro-processor manufacturerer and the only rival of Intel has announced that that it will be investing $7.5 million in chip designer Transmeta to strenthen the bond between both of them.

In this investment, AMD will receive preferred shares of Transmeta. This decision affected the share market quite effectively. After the announcement, Transmeta shares rose 24 cents, or 34 percent, to 94 cents in late trading. Shares of AMD rose 20 cents, or 1.4 percent, to $14.39.

Mentionworthy is that Transmeta's share price had slipped from $2 range early last year. Transmeta's financial performance has been declining as it has transitioned from a chip designer and manufacturer to one that focuses on licensing its technology.

Last year, AMD announced that it planned to sell Transmeta's Efficeon chips under the AMD brand. The AMD-branded chips would go in PCs, as part of Microsoft's FlexGo project.

The company also announced, as part of its first-quarter earnings, it would reduce its workforce by 15 percent to 20 percent in the second quarter.
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