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Apple buys chip developer, PA Semi

Posted by Dennis Sellers Apr 23, 2008 at 4:19am

Late Tuesday, in response to questions from Forbes.com, an Apple spokesman said Apple has agreed to buy a boutique microprocessor design company called PA Semi. The company, which is known for its design of sophisticated, low-power chips, could spell a new future for Apple’s flagship iPhone, and possibly iPod products as well, the article adds.

PA Semi is a fabless semiconductor company that makes PWRficient processors for the embedded-computing markets. It was established in 2003 by industry veterans, including Dan Dobberpuhl, lead designer of the DEC Alpha series of microprocessors, the StrongARM microprocessors, and the first multicore systems on chip with the SiByte 1250. PWRficient processors are based on, and fully software compatible with, the Power Architecture instruction set, licensed to P.A. Semi by IBM. P.A. Semi’s first dual-core system on chip, the PA6T-1682M, enables system manufacturers to design in three to four times more functionality and performance at a given power level than previously possible, the company says.

PWWRficient are 64-bit multicore processors designed to be power efficient. For example, the first PWRficient processor, a dual-core chip running at 2GHz, dissipates just 5-13W typical, depending upon the application—up to three to four times less power than similar high-performance microprocessor platforms, according to the folks at PW Semi.

“Apple buys smaller technology companies from time to time, and we generally do not comment on our purposes and plans,” Apple spokesman Steve Dowling told Forbes. He declined to comment on the value of the deal, which a person familiar with the deal suggested was done for US$278 million in cash, the article adds.

Here’s Forbes’ take on the acquisition: “The decision to center the iPhone design around a chip that Apple could own marks a significant strategic choice by Apple Chief Executive Steve Jobs, and is aimed at ensuring Apple can continue to differentiate its flagship phone as a raft of competitors flood the market. According to a source affiliated with the chip company, Jobs and Senior Vice President Tony Fadell led the tiny group of executives who spearheaded the acquisition, which included negotiations that took place in Jobs’ home. Apple’s choice is a blow for chip maker Intel, which has been trying to convince Cupertino, Calif.-based Apple to rely on Intel’s chips—particularly its latest low-power line up, called Atom.”

However, it seems to us at Macsimum that the ARM background of Dobberpuhl means mobile device emphasis and not desktops. Intel has nothing to fear but competition in this mobile device area and laptops. The 300 percent efficiency gain in battery powered devices means something as does the 64-bit capability.

Of course, this could just be an investment like Apple invested in ARM and Adobe in past years. $280 million doesn’t begin to touch their cash surplus and so is worth the risk (though I doubt they’ll get the same return percentages as the $400 million to buy NeXT 11 years ago).

(Thanks to Tim McGuire for his help with this article.)

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