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Broadcom's Down With AMD

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Even CEO scandal can't halt company's growth.

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Broadcom (BRCM) has agreed to buy Advanced Micro Devices' (AMD) digital-television business, which includes processors, receivers and software, for $192.8 million.

While Broadcom currently focuses on manufacturing parts for middle- to high-end DTV, the new technology it's acquiring from AMD will help the company expand to more budget-friendly markets, according to Daniel Marotta, Senior Vice President and General Manager of Broadcom's Broadband Communications Group.

The deal highlights Broadcom's continued growth during an otherwise rocky year. Last June, the company suffered a PR disaster when its former CEO and founder Henry Nicholas III was indicted for felony drug, conspiracy and securities fraud.

Broadcom also agreed to pay $12 million to settle SEC charges that it falsified income by backdating stock-options over a 5-year period. The company was forced to retrace its earnings by $2.2 billion.

However, it isn't all bad news for the southern California-b chip-maker. Last quarter, revenue for the company nearly quadrupled, surpassing $1 billion for the first time. The company also received $35.6 million in royalties from Verizon (VZ). Shares of Broadcom are up 5% this year, compared to last year's 19% decline.

For more on Broadcom and its infamous CEO, check out Hoofy and Boo's always astute report.


No positions in stocks mentioned.

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