Sun Acquires Chip Maker

Sun Microsystems is buying the technical assets of Montalvo Systems, a semiconductor company that was looking to break into the x86 market against the likes of Intel and Advanced Micro Devices.

In a statement, a Sun spokesperson said the company completed the acquisition of Montalvo April 21, although the announcement was not made until April 24. Terms of the deal were not disclosed because the acquisition was “not material with respect to Sun's earnings per share,” according to the statement.

It is not clear why Sun, which is best known for its own line of SPARC and UltraSPARC processors, bought a company that had focused on the more popular x86 market, which are the primary chips used in PCs and commodity servers. In addition to its own SPARC- and UltraSPARC-based servers, Sun has a number of systems that use AMD and Intel processors.

“The assets will be integrated into the Microelectronics business unit,” Dana Lengkeek, a Sun spokesperson, wrote in an e-mail. “We believe acquiring these assets will enhance the current and future products we are developing and expect them to contribute to future generations of Sun's microprocessor technology, which will in turn drive additional differentiation for Sun's Systems products.”

There is not much known about Montalvo. A check of its Web site shows a number of job listings for the Santa Clara, Calif., company, but no list of products.

“Montalvo Systems is a well funded fabless semiconductor startup funded by prominent Silicon Valley venture capital firms,” according to a statement on the Web site.

Montalvo is the second chip company snatched up by a major vendor this week. On April 23, Apple announced it will buy P.A. Semi, a small chip company that makes low-power processors for the embedded market and licenses IBM’s Power Architecture technology.

Since P.A. Semi is focused on low-power chips, Apple could use the technology in a range of its own devices, including the iPhone and iPod. Montalvo also appears to have been developing low-power processors, according to several published reports.