AMD has sold its digital television chip business, acquired in its 2006 buyout of ATI.
Broadcom is a logical buyer as it has become one of the leading players in digital TV, and will pay $193 million (£105 million) for the division, which has been operating at a loss.
The sale is part of AMD’s strategy to focus on its core business – the PC microprocessor market.
The firm has recently seen share prices drop following seven consecutive loss-making quarter. Former CEO Hector Ruiz was replaced last month by COO Dirk Meyer.
After the announcement, AMD saw its shares rise by three per cent in midday trading.