23 Comments

Summary:

Apple has acquired PA Semi, microprocessor design firm for $278 million in cash, reports Forbes’ Erika Brown. PA Semi was started by Dan Dobberpuhl, a chip designer closely associated with Alpha and StrongARM chips developed by Digital Equipment. The decision to center the iPhone design around […]

Apple has acquired PA Semi, microprocessor design firm for $278 million in cash, reports Forbes’ Erika Brown. PA Semi was started by Dan Dobberpuhl, a chip designer closely associated with Alpha and StrongARM chips developed by Digital Equipment.

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 decision is going to post a problem for Intel Corp. and its newly announced Atom chip. It is unlikely that Intel’s chip was going to find room in the handsets made by some of the larger players.

Chip industry insiders believe that Intel was betting on an Apple win to gain scale for Atom which in turn would allow it to dominate the “portable internet device” market. iPhone and iPod Touch are the early leaders in the PID category, and are unlikely to cede that spot for near foreseeable future.

PA Semi had designed a 64-bit dual core chip that consumer between 5-to-13 watts running at 2 gigahertz, making it a good chip for the PID category. So far, PA Semi has found takers in telecom equipment makers.

Beyond3D puts context on the news announcement. While they are mostly right about everything, I don’t think you can rule out the iPhone argument.

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  1. Keegy United States – With iPhone In Mind, Apple Buys Chip Maker Tuesday, April 22, 2008

    [...] With iPhone In Mind, Apple Buys Chip Maker [...]

  2. Shocker – Apple buys PA Semi « Media – what is it good for! Tuesday, April 22, 2008

    [...] 22, 2008 · No Comments I am not sure what to make of this but Apple has apparently bought PA Semi for $278M.  When Apple made the switch to Intel, PA Semi was supposedly in the mix, so I [...]

  3. Om, you missed the point PA Semi’s product is based on IBM’s PowerPC architecture (!) and it is not aimed at the iPhone.

  4. Apple Purchases PowerPC Chipmaker PA Semi » By Earl Moore » » Meandering Passage Wednesday, April 23, 2008

    [...] – What is the PWRficient processor from P.A. Semi? Forbes – Apple Buys Chip Designer GigaOM – With the iPhone in Mind, Apple Buys Chip Maker Sphere: Related [...]

  5. Stacey Higginbotham Wednesday, April 23, 2008

    Wow, 5 to 13 watts is a bit hot for a cell phone. They’ll have to scale back on wattage to make that work for the iPhone.

  6. Apple’s decision is going to pose a problem for Intel Corp.

    … are unlikely to cede that spot for the near foreseeable future.

    … core chip that consumes between 5-to-13 …

  7. Klaus

    you are right but I think they are acquiring the team and they are going to do their own tweaks in order to make chips that work best for their PID devices, aka iPhone. They are acquiring a pretty nifty team of chip heads who are lowering power consumption.

  8. @ Stacey & Andrew

    Yes, that is a lot of power consumption but now they can dedicate the team on tackling the problem of speed-heat. More reporting on this later today

  9. Wednesday links: maximum point of stress « Abnormal Returns Wednesday, April 23, 2008

    [...] Apple (AAPL) makes a move into the chip world. (Gizmodo, GigaOM) [...]

  10. Apple’s Component Strategy Shifts – Sramana Mitra on Strategy Wednesday, April 23, 2008

    [...] Om Malik chimes in to say that this would pose a problem for Intel’s Atom chip. More on the Intel woes around this decision at Ars Technica. [...]

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