The company also announced its president and chief operating officer, Richard J. Koeltl, has left the company. Koeltl, who was overseeing the modem chip business at the company's San Jose operations, said he is leaving because of disagreements regarding the company's direction.
James Diller, chairman and chief executive, will assume some of Koeltl's duties.
Sierra plans to exit the modem chipset business because of increasing competition and shrinking profit margins, Diller said in a statement.
"We intend to focus our energies and resources on our infrastructure and networking product lines, where we believe Sierra holds a leadership position," Diller said.
Sierra, however, will continue to provide customer support for its modem chipsets until a sale is completed.
The company expects to release its third-quarter results during the third week of October.