A "clean room" bathed in ultra-violet light at the Globalfoundries microchip plant in Dresden, Germany (Pic by Jeff Topping / The National)
Can Samson slay Goliath? Taking its cue from the biblical tale of the underdog defeating the giant with a sling of a well-aimed rock,
Smooth-Stone, a startup based in Austin, Texas, is planning on disrupting the entire microchip industry.
ARM chips are more commonly known for being less powerful but more energy efficient - and therefore cooler - than their big x86 brothers, and are mainly found in mobile phones and other pieces of consumer electronics. Smooth-Stone thinks it can tweak this model and make a cheaper, more efficient chip that can still manage the heavy lifting of a server.
If they succeed, they will become an obvious acquisition target. Intel or AMD would obviously be interesting in snapping them up and snuffing an emerging competitor; so too would a major server maker like Dell, HP or Oracle. A wild card could even be companies like Google, Yahoo or Amazon, who operate massive global clouds of servers - why not skip the middleman entirely and make your own chips?
This is where Abu Dhabi's investment steps in.
ATIC already owns Globalfoundries, the world's second-largest
microchip manufacturer. semiconductor foundry company. Mubadala, another Abu Dhabi government vehicle, is the largest shareholder of AMD, which buys most of the chips produced by Globalfoundries. If Smooth-Stone is successful, it would make an obvious candidate to be merged into one of these two businesses. Chartered Semiconductor, the Singaporean chipmaker,
was merged into Globalfoundries soon after being acquired by ATIC.
Alternatively, ATIC could link the chip designs done by Smooth-Stone to the manufacturing processes of its giant chip factories - if the company and its intellectual property are flipped to somebody like Google or HP, Globalfoundries could still do a healthy business as the maker of the chips.
(Updated: in the comments, Adolfo pointed out correctly that Globalfoundries, the Mubadala owned semiconductor manufacturer, is not the world's second-largest maker of microchips, as I originally wrote. It is the second largest foundry company, meaning a dedicated manufacturer, not designer, of chips. The post has been corrected.)
There is a major mistake in your statement "ATIC already owns Globalfoundries, the world's second-largest microchip manufacturer.", Globalfoundries is somewhere the 30th or below IC manufacturer in the world, not the 3rd as you state. Refer to IC Insights Rankings for 2010 that can be found here: http://en.wikipedia.org/wiki/Semiconductor_sales_leaders_by_year#Ranking_for_year_2009
Hi Adolfo,
Thanks for the comment - you're right, it was worded wrong. Globalfoundries is the second largest foundry company, not semiconductor maker. The post has been corrected.