RealTime IT News

AMD Grabs Alchemy Semiconductor

AMD -- well embroiled in a semiconductor supremacy battle with archrival Intel Corp. -- took steps to improve on its embedded processor technology for devices beyond the PC Wednesday when it agreed to buy privately-held Alchemy Semiconductor for an undisclosed sum.

Alchemy Semiconductor makes low-power, MIPS-based microprocessors for personal connectivity devices such as personal digital assistants (PDAs), Web tablets, and other portable gadgets. The Austin, Texas-based outfit's processors power Windows CE and Linux operating systems.

The deal highlights AMD's belief that interest for non-PC devices will gain serious momentum in coming years, which means chipmakers will have to keep up the process of making new processors to support newfangled handhelds and other gadgets.

Hector Ruiz, president and chief operating officer of AMD, acknowledged his firm's beliefs in a public statement.

"Today our customers are looking to AMD for non-PC solutions in addition to PC solutions for Internet access," Ruiz said. "AMD is one of the few companies in the world with the experience, customer relationships, and intellectual property to provide complete connectivity solutions for both PCs and non-PCs."

Alchemy will be folded into the newly-formed Personal Connectivity Solutions business unit, manned by Dr. William T. Edwards, who will serve as vice president and general manager. Alchemy Semiconductor founders Rich Witek and Greg Hoeppner will join AMD, reporting directly to Edwards. No word about the status of other employees was made public.

Interestingly, the deal had Microsoft Corp.'s blessing, probably because the software giant and Alchemy have worked together before. In November, the two got chummy at DevCon in Las Vegas when Alchemy ran Windows CE on its chips, a relationship that goes back to Feb. 2001.

"OEMs are looking for high-performing, low-power processors for their small-footprint, wireless Windows-powered devices," said Scott Horn, director, Embedded and Appliance Platforms Group at Microsoft Corp. "The acquisition of Alchemy will help AMD meet this demand, enabling them to provide embedded developers with a compelling solution to power these next-generation smart devices."

AMD meanwhile has been busy rolling out mobile chips to keep up with giant Intel, including AMD Durons that run at 1.2GHz and 1.1GHz and a AMD Athlon 4 processor 1500+ for notebooks.

Generally, the chip market has been flagging, according to the Semiconductor Industry Association (SIA), which said earlier this week that chip sales dropped 32 percent in 2001, to $139 billion. On a brighter note, the market should improve, according to SIA President George Scalise: "Increased sales in markets outside Japan indicate that demand for semiconductors in the major economies is pulling out of a downturn and began to grow in the fourth quarter. We expect flat to slightly up sales in the first quarter of 2002, another indicator of recovery since this is traditionally a seasonally flat to down quarter."

AMD's acquisition of Alchemy is expected to be finito during the first quarter of 2002.