Advanced Micro Devices is doing what it can to keep from taking on water. Hurt by a bruising battle with Intel, AMD agreed to sell off its handheld graphics business and multimedia assets to Qualcomm for $65 million.

The move will give San Diego, Calif.-based Qualcomm a more complete arsenal of chip assets that it can integrate into a single chip for running a cell phone. AMD will get more cash as it makes progress toward dividing itself into two different companies with fresh capital from the government of Abu Dhabi.

Qualcomm already has graphics cores but the ones from AMD are likely to be good at providing high-quality 3-D graphics at low power levels because these chips are descendants of AMD’s high-end 3-D graphics chips for computers. The deal closed on Jan. 19. AMD had previously sold off its digital TV chip business to Broadcom. Qualcomm will take on an unspecified number of AMD employees.

AMD is in the midst of cutting nine percent of its staff, or about 1,100 jobs, and is cutting salaries for all workers as part of an effort to keep its head above water during the downturn.

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