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Motorola Airs Ultrafast Chip, Sheds a Unit

Schaumburg, Ill.-based Motorola Inc. Tuesday said it has forged a computer processor that is roughly 35 times faster than today's models and that will cut the cost of making such devices as cell phones and DVD players.

The chipmaker told the Associated Press that the chip is made with a mixture of silicon and gallium arsenide, a more expensive material that can transmit signals at greater speeds. Analysts have said the chip is a watershed moment, because it breaks the cost-effectiveness barrier by being simultaneously inexpensive and sufficiently faster than current chip technologies. Motorola has applied for 270 patents for the materials and production process.

Motorola could benefit from the cheery technology news, which comes in stark contrast to recent financial and operations developments. The firm has felt the squeeze in the telecommunications industry, forcing it to cut jobs, pare down costs and divest itself of non-core businesses. Indeed, Motorola announced 30,000 job cuts this year, which was marred by downturns in its cell phone and semiconductor operations.

So hammered by the industry-wide spending slowdown is Motorola that it also divested itself of its networks services unit Tuesday, selling it to Platinum Equity LLC, a private equity firm that lives to buy tech companies. Over the next couple of months, Platinum will tuck in Motorola's entire Multiservice Networks Division, and will change the operation's name to Vanguard Managed Solutions (VanguardMS). Terms of the deal were not disclosed.

Vanguard Managed Solutions, which will be based in Mansfield, Mass., will offer network design, implementation, integration and secure network operations and management to customers.

"VanguardMS fits well with our strategy of building our presence in the network space," Tom Gores, Platinum Equity president and chief executive, said in a news release.

The play is the second divestiture of a division by the outfit in the last 30 days or so; it sold its Integrated Information Systems Group for $825 million to defense contractor General Dynamics Corp. last month. The divestitures are an attempt to help the firm focus on long-term strategies.