Qualcomm has acquired AMD's handheld chip business for around $65m (£47m) to enhance its multimedia chip capabilities.
"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," said Steve Mollenkopf, executive vice-president of Qualcomm and president of Qualcomm CDMA (3G) Technologies.
"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."
Robert J Rivet, chief operations and administrative officer and chief financial officer of AMD, said, "With the sale of these handheld technology assets and resources to Qualcomm, we are better able to focus on our core business and leverage our unique position as a leader in both x86 computing and high-end graphics.
"We believe the talented AMD Handheld employees will be a great asset to Qualcomm."
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.
Earlier this week, loss-making AMD said it would be making another 1,100 staff redundant.