AMD and Freescale Fire Sales Won’t Burn Austin

AMD finally announced that it has unloaded its digital television chip division to Broadcom for the low, low price of $192.8 million cash, which it should have done ages ago. The news should cheer investors who have been repeatedly disappointed by AMD’s earnings, and should also elate Broadcom which walked away with a steal on which it can base its DTV efforts.

Meanwhile, just a few miles up the road from AMD’s Austin campus, Freescale may be entertaining buyers as well. An article in the Austin American Statesman gives substance to some rumors I’d heard about the wireless chip division being for sale and my general theory that Freescale needs to slim down. We knew the wireless division was in trouble, especially as Motorola, its largest customer (and former parent company) began buying its chips from Qualcomm and TI. Unfortunately for Freescale, most of its wireless technology wouldn’t be that interesting to a big wireless chip firm because it would already have much of Freescale’s know how. That makes a foreign buyer seeking bargain basement prices much more likely.

Here in Austin the news of cheap chip units for sale might be disappointing, but there’s still plenty to cheer about. The city may have lost most of the fabrication plants that gave it the Silicon Hills nickname, (and may lose more depending on AMD’s asset-light strategy), but it still is home to several important design efforts. IBM’s cell processor was designed in Austin, as were aspects of Intel’s Atom chip. ARM Holdings, Via Technologies and AMD all have design engineers here working on big projects.

Perhaps most enticingly, there are some interesting startups. Luxtera, a CMOS-based optical chip maker has the potential to achieve optical speeds between chips and on individual chips cheaper than current generation technology, and Black Sand Technology, which is designing a silicon-based power amplifier, are both in Austin. If its chips work, Black Sands could benefit greatly from California’s recent ruling that gallium arsenide, a popular semiconductor compound used in most power amplifiers is a carcinogen.

Austin’s Silicon Hills may be eroding, but for high-end jobs, the hills are still alive.

image of AMD’s new Austin HQ under construction in Aug. 2007 from AMD