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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.

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

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  2. [...] 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 [...]

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  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.

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  4. [...] – 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 [...]

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  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.

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  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 …

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  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.

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  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

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

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  10. [...] 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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  11. Actually Om, I was trying to correct the words you used or omitted. Looks like you used spell check, but didn’t reread before posting.

    Sorry if I came off as a grammar Nazi/jerk.

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  12. Sachin Balagopalan Wednesday, April 23, 2008

    They are looking beyond the iPhone IMO…

    http://tinyurl.com/5gvyed

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  13. “Consuming 5-13 watts” – that is a power hug, even for mogile market.
    Current mobile chips consume less then 5W idling, Atom consumes a fraction of that. At 5W consumption your battery life on PID will be a joke.

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  14. Om, IMHO Steve Jobs figured he must try everything to lock out competition on the hardware/cloning front.

    Jobs does not want to see a Compaq <-> IBM compatible PC scenario developing again.

    Jobs wants to move back to (now their own) PowerPC chips COMPLETELY (if possible)

    Will this work? The chances are very low, but if this works out Jobs is The Man again.

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  15. Since they do maintain an os for both intel and powerpc processors, I would not be that surprised if they come up with something nifty powered by that chip.

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  16. [...] PM PT Comments (0) Ever since Forbes.com reported that PA Semi, a fabless chip company was being acquired by Apple for $278 million, there has been a lot of debate around why Apple bought them. I thought it [...]

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  17. [...] Apple Mikroişlemci Üreticisi PA Semi’yi satın aldı Forbes’dan Erika Brown‘un haberine göre Apple mikroişlemci tasarım firması PA Semi’yi 278 milyon dolara satın aldı. Buy satınalma iPhone tasarımını Apple’ın sahip olduğu bir mikroişlemci etrafında merkezileştirecek. Aynı zamanda bu adım stratejik önemde bir karar ve Apple’ın amiral gemisi iPhone’u diğer rakiplerinden farklılaştıracak. http://gigaom.com/2008/04/22/apple-pa-semi/ [...]

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  18. [...] own application processors for the iPhone — something long suspected after Apple purchased low-power chip firm PA Semi and got a license to tweak the ARM mobile core. Such news might cheer Apple enthusiasts, but [...]

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  19. [...] the many chipmakers crowding this market. This is why Qualcomm likely bought these assets, and why Apple is building its own integrated SoC for the [...]

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  20. [...] is enhancing the core processor with the help of design team from PA Semi, a company Apple bought for roughly $278 million in 2008. Apple has focused on enhancing video and graphic capabilities of the device with its internal [...]

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  21. [...] according to PEHub. Agnilux was founded by engineers who formerly worked at startup PA Semi, which Apple purchased in 2008. The startup is supposedly making some type of server. Google buying such a company could go a long [...]

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  22. [...] according to PEHub. Agnilux was founded by engineers who formerly worked at startup PA Semi, which Apple purchased in 2008. The startup is supposedly making some type of server. Google buying such a company could go a long [...]

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  23. [...] this tightly integrated strategy, such differentiation at the silicon level makes sense. Look at Apple’s purchase of PA Semi and Intrinsity to goose its own hardware as it pushed the envelope battery life and performance for [...]

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