Qualcomm positioning for mobile multimedia leadership

It looks like Qualcomm is positioning itself to become a leader in the growing mobile graphics market with it’s current acquisition of AMD’s handheld business that includes several graphics and multimedia technology assets.

Steve Mollenkopf, executive vice president of Qualcomm and president of Qualcomm CDMA Technologies has this to say about the acquisition of the AMD handheld business.

“This acquisition of assets from AMD’s handheld business brings us strong multimedia technologies, including graphics cores that we have been licensing for several years. Bringing this technology in-house creates even greater synergy as we seamlessly integrate the best-in-class multimedia performance AMD offers into our system-on-chip (SoC) products.”

Under the terms of the agreement, Qualcomm has extended offers of employment to various design and development teams from AMD’s handheld business. The teams are developing technologies to enhance mobile devices in areas including 2D and 3D graphics, audio/video, display, and architecture.

The two companies signed and closed a binding agreement on January 19, 2009, having already received required regulatory approvals. Cash consideration from Qualcomm to AMD, as part of the transaction, is $65 million, subject to adjustments for employee-related expenses and a holdback for certain customary indemnification obligations. Both AMD and Qualcomm are committed to a seamless transfer of business assets, as well as a smooth transition for employees.

Qualcomm expects the acquisition to be approximately $0.02 dilutive to pro forma earnings per share in fiscal 2009 and accretive to earnings by the second half of calendar year 2010.