Amazon Enters Semiconductor Business

A secretive Amazon.com Inc. unit broke its silence Wednesday about plans to market computer chips and related components to other companies.

Annapurna Labs, an Israeli company purchased by Amazon last year that is now based in Silicon Valley, said it is targeting customers designing home equipment like Wi-Fi routers, data storage gear and media-streaming devices.

Some of its technology is already available in commercial products, Annapurna said. It cited manufacturers that include Asustek Computer Inc., Netgear Inc. and Synology Inc.

Annapurna said its products include chips based on technology licensed by ARM Holdings PLC, the most widely used processor type in smartphones. Intel Corp., the biggest supplier of chips used in personal computers, has tried for years to crack ARM's hold in smartphones with little success.

Annapurna said it was trying to address the issue that many home devices are severely limited in computing and networking power. Its Alpine chips, the company said, pack up to four processors and multiple kinds of networking technology to boost the performance of its customers' products.

In January, when Amazon bought Annapurna, purportedly for around $350 million, according to people familiar with the matter, it seemed likely the retailer would deploy its chip technology in data centers related to its cloud computing division, Amazon Web Services.

Amazon has shown a willingness to buy hardware development firms to halt their retail sales and develop technology for internal use. That is what it did with Kiva Systems, a warehouse robot developer that it bought for about $775 million in 2012, ending the robot maker's growing business selling to other retailers.

So it is somewhat unusual that Annapurna is selling its chips to other firms. It isn't yet clear what plans Amazon may have for Annapurna beyond the Alpine chips. An Amazon spokesman declined to comment about the division.

Annapurna Labs was founded in 2011 by Avigdor Willenz, founder of chip-design company Galileo Technologies Ltd., which was acquired in 2000 by Marvell Technology Group Ltd. for $2.7 billion. The chip maker originally was funded by Mr. Willenz and people related to him.

Write to Don Clark at don.clark@wsj.com and Greg Bensinger at greg.bensinger@wsj.com

(END) Dow Jones Newswires

January 06, 2016 19:55 ET (00:55 GMT)

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