Meet Atiq Raza. When AMD (NYSE:AMD) bought NexGen in the mid-'90s, the superstar engineer headed the new talent pool that came over to design AMD's K6 and Athlon processors. As AMD's chief operating officer and president, he guided the company to some of its first real successes in the protracted x86 processor war against Intel (NASDAQ:INTC) -- and then he left the company.
This week, Raza reconnected with his past, as the startup he founded after his AMD days acquired the Alchemy processor line, which happens to be AMD's family of embedded chips based on the MIPS architecture. Raza Microelectronics, otherwise known as RMI, may be small and privately held, but with this agreement, it just gained a sizable user base and some well-respected technology that generally complements its own in-house designs for communications equipment.
AMD, in return, is investing in RMI and launching an engineering partnership to support RMI's designs on the AMD Torrenza platform. That's a fancy name for a server computing design philosophy that allows specialized co-processors to access other system resources very efficiently through HyperTransport and PCI Express interconnects, or even by plugging directly into spare CPU sockets. No specific product announcements have been made yet, but it's reasonable to expect RMI's advanced networking and communications chips to take advantage of these platform efficiencies to improve networking performance and feature sets.
The Alchemy acquisition should give RMI the ability to build tightly integrated mini-systems that can do more than just run an Ethernet port or two. Built-in network management, security, and monitoring should be a snap, and the company may well have some plans I haven't thought of, too. With the engineering talent at RMI's disposal, it should have a few original ideas up its sleeve.
As for AMD, the company seems dead-set on focusing on its core competencies in the mainstream CPU arena. The flash operations have been spun off into Spansion (NASDAQ:SPSN), and now the embedded chips are gone as well. There are rumors making the rounds about AMD buying ATI (NASDAQ:ATYT), more to get hold of its chipset expertise than its graphics chips. Such a move would let AMD build better systems of its own and also make it a supplier of parts for many Intel-based systems. You've got to appreciate the sweet irony in that move, if it comes to pass.
Raza has surrounded himself with impressive talent, mostly hired away from other chipmakers such as Intel, AMD, Texas Instruments (NYSE:TXN), and Cisco (NASDAQ:CSCO). The company is looking to make inroads in the handheld and set-top markets, as well as in servers and network infrastructure equipment. It's a wide net to cast, but you might expect that from Raza's companies. It's exactly the kind of attitude and visionary leadership that Rule Breakers are made of, and my portfolio could have a spot for RMI if it ever does go public. It would really be a shame to keep this company private for much longer.
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Fool contributor Anders Bylund keeps disqualifying himself from buying any Cisco stock. Foolish disclosure rules with an iron fist, and he doesn't own any of the stocks mentioned today. Intel is a Motley Fool Inside Value selection.
