Sun acquired microprocessor startup Montalvo Systems for an undisclosed sum, the company confirmed Thursday.

"We believe acquiring these assets will enhance the current and future products we are developing and expect them to contribute to future generations of Sun's microprocessor technology which will in turn drive additional differentiation for Sun's Systems products," said Dana Lengkeek, a Sun spokeswoman, in an e-mail.(View our slidehow of 2008's hottest tech M&A deals.)

Sun is one of the few companies that continues to design microprocessors for use in its own servers. For example, the company's UltraSparc T2, formerly known as Niagara 2, is an octal-core chip that integrates other components of a computer on the same chip. The processor is capable of running Sun's own Solaris operating system and Linux.

Montalvo is believed to working on a low-power processor that aims to compete with chips from Intel and Advanced Micro Devices. The unique feature of Montalvo's design is the use of asynchronous processor cores. Instead of multiple, identical cores found in Intel's chips, Montalvo reportedly plans to use different types of cores, some more powerful than others, on the same chip to improve performance and keep power consumption low.

Little information about Montalvo is available on the company's Web site, which describes the company as just " a well funded fabless semiconductor startup funded by prominent Silicon Valley venture capital firms."

Among observers in the microprocessor industry, Montalvo was watched with a level of interest similar to that of PA Semi, which was acquired by Apple earlier this week in a deal reported to be worth $278 million. Unlike Montalvo, PA Semi has a chip in production, a dual-core processor based on the Power architecture licensed from IBM.

Apple has not detailed its plans for PA Semi.

The IDG News Service is a Network World affiliate.

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