Announcing the AMD Divestituron

AMD may have written down its acquisition of ATI for the last time. On Tuesday, the company said it will sell the underperforming handset business it acquired with its 2006 purchase of ATI to Qualcomm (QCOM) for $65 million. The transaction follows the August 2008 sale of AMD’s digital television business–also acquired as part of its costly and troubled merger with ATI.

Purchased in 2006 for 5.4 billion as a means of bolstering AMD’s position in the commercial desktop and mobile computing markets–two areas where the company had little success–ATI is as noteworthy for the impairment charges it brought the company as for its technologies. Since then, AMD (AMD) has taken $3.2 billion-worth of impairment charges related to the acquisition, and its market cap has slipped to $1.22 billion.

Clearly, the ATI deal has not proven to be the panacea for which AMD had hoped. And in these turbulent economic times, which are already playing havoc with its finances, the company is wise to divest itself of some ATI ballast. Better to shore up its finances and focus on its core microprocessor business than founder in a sea of impairment charges.