SAN JOSE, Calif.--At Oracle Corp.ís annual meeting in San Francisco on Thursday (Sept. 23), the database company said it may buy a chip maker.
Oracle Chief Executive Larry Ellison made the surprising announcement, saying he wants to bolster the companyís hardware business. Earlier this year, Oracle completed the purchase of server manufacturer Sun Microsystems Inc.
Ellison did not elaborate which companies Oracle is looking at. Still, the announcement caused a wave of speculation in the chip community. Many stocks, including ARM Holdings plc, jumped as a result of the news.
So which chip companies are the likely acquisition targets for Oracle?
Some speculated that Advanced Micro Devices Inc. and ARM were possible candidates, although analysts dismissed those rumors. Mellanox Technologies could be an acquisition candidate, according to the International Business Times, citing ThinkEquity as its source.
Still others think that Oracle may take a look at an EDA vendor. Providing their opinions, editors from EE Times weighed in on what Oracle may do in terms of chip acquisitions:
Rick Merritt, editor-at-large for EE Times:
''Mellanox is a distant possibility. They are the only maker of Infiniband chips. (They) supply IBM and other Oracle competitors. They are also doing pretty well these days so they donít need or probably even donít want to be acquired.
The megatrend in servers is to sell servers, networking and storage as a bundle. Sun is relatively weak in networking compared to HP and IBM. If Oracle acquires any chip companies, I suspect they would be in 10G+ Ethernet.
A more likely (acquisition) scenario would be Aquantia who like Teranetics (bought by PLX) is a standalone 10GBase-T PHY company that has raised $100 million and not shown profitability yet. A wild card might be SeaMicro, that Atom-based low power multiprocessing server startup that debuted this year. I would not expect Oracle needs a fab.íí
Mark LaPedus, semiconductor editor of EE Times:
''I can see Oracle ditching Sunís Sparc chip in the distant future. Sparc is running out of gas. But I canít see Oracle buying AMD or ARM. That makes no sense. I also donít see Oracle building a fab.
However, I could see Oracle investing or buying a company with expertise in the ARM world. Oracle/Sun may want an ARM-based server one day. I can see Oracle investing in startup Smooth-Stone Inc.. The ARM-based chip server startup has recently raised $48 million from a syndicate of investors, including ARM, Advanced Technology Investment Co. (ATIC) and Texas Instruments Inc.
Like Rick, I can see Oracle buying a networking chip firm. But one of the issues for computer systems houses is the lingering bandwidth bottleneck problem, especially between the processor and memory. There are a lot of new ideas on how to solve the problem, namely using a new class of storage subsystems or I/O systems, based on NAND.
Perhaps Oracle could make a play for any number of these guys, namely Fusion-io, Violin Memory and Virident. Virident seems ripe for an acquisition, at least in my opinion. So is Fusion-io, which has a strategic alliance with HPís server unit. I am sure Ellison would love to upset HP even more and buy Fusion-io.
Last but not least, Oracle seems to be going against the grain here. One of Sunís server rivals-IBM-has an internal chip unit. Big Blue is mainly known for developing ASICs and microprocessors. IBM also has a fab.
IBM also made several chip acquisitions over the years, but most of those did not work out. Big Blue has divested many of those acquisitions. It got burned in the standards products business and would prefer to stay out of the arena.
Another server vendor-Hewlett-Packard Co.-got out of the chip business several years ago. If you recall, it spin out its chip operations into a company called Agilent, which, in turn, spun out the IC unit into an entity called Avago.
Another computer vendor, Fujitsu Ltd., is spinning out its chip unit. So Iím scratching my about Ellisonís comments. Perhaps he wants to emulate Cisco, which has made several chip acquisitions in the past, as a means to gain internal expertise and designers.''
Dylan McGrath, editor of EETimes.com:
''In the past there has been some wild speculation that Oracle might muscle its way into the EDA business by buying one of the 'Big Three EDA vendorsóSynopsys Inc., Mentor Graphics Corp. or Cadence Design Systems Inc. But people who follow EDA are quick to dismiss this speculation, often laughingly. EDA is simply too small a market to interest Oracle, and there are not many synergies between the businesses. Ray Bingham, a former CEO and chairman at Cadence, has been a member of Oracle's board of directors since 2002.''