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Sun acquires Montalvo

by on25 April 2008

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Deal actually happened April 21st

Sun Microsystems, Inc. announced that it has purchased Montalvo Systems, after much speculation that this would occur. Montalvo designed an energy-efficient multicore chip that runs the same software as Intel and AMD processors; however, it did not actually ever produce the chip.

It was rumored that Montalvo had a deal with Fujitsu to fabricate the chip, but this fell through. What made the Montalvo’s four-core chip different is that the chip is asymmetrical; two of the cores are high-powered cores for running intense applications and the other two are more energy efficient. Montalvo has submitted several patents for its ideas and some of these patent applications have recently become public.

Venture capitalists reportedly sunk more than $73 million into Montalvo, but did not receive a return from any products being made or sold. Montalvo was said to be seeking $100 million in additional VC funding, but was turned down. 

It had major layoffs in early April just before the Sun deal was finally struck. The terms of the deal between Montalvo and Sun were not released, but analysts speculate that the purchase by Sun was for significantly less than $73 million.

Montalvo’s patents and its top-notch engineering team are the real value in the deal for Sun. Montalvo employs noted chip designers. Sun already uses Intel and AMD processors, but does not own its own chip fabs. Analysts predict that Sun will not continue production of a chipset that competes with Intel and AMD.

Sun did not issue a press release, but a Sun representative issued an e-mail that said, “Montalvo’s assets will be integrated into Sun’s Microelectronics business unit. 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.”

Last modified on 25 April 2008
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