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Summary:

Ever since Forbes.com reported that fabless chip company P.A. Semi was being acquired by Apple for $278 million, there has been a lot of debate as to why. I thought it was all about the iPhone, but not everyone agreed. And as we argued, news started […]

Ever since Forbes.com reported that fabless chip company P.A. Semi was being acquired by Apple for $278 million, there has been a lot of debate as to why. I thought it was all about the iPhone, but not everyone agreed.

And as we argued, news started leaking out that some powerful P.A. Semi customers were hopping mad over the deal. The Department of Defense is worried that Apple will stop production of the PWRficient processor that is designed into many new armed services initiatives.

On Monday (April 21), P.A. Semi informed its customers it was being acquired and it could no longer guarantee supplies of its chips. The startup did not identify the acquiring company but said that company may be willing to supply the chip on an end-of-life basis, if it could successfully transfer a third-party license to the technology.

The EE Times further adds:

The source said he is aware of more than 10 defense systems using the PWRficient CPU, one of which recently forecasted it will use 70,000 of the chips over the next ten years. The board company alone forecast it would sell $100 million in products based on P.A. Semi chips over the next four years. Users include defense giants such as Lockheed Martin and Raytheon, the source said.

By Om Malik

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  1. Since all of the PA Semi finished units are produced by outside fabs, existing products will surely be available under license.

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  2. [...] It’s possible the licensing issues could get worked out to maintain supply “on an end-of-life basis” but in that same statement, P.A. noted that their buyer (Apple) wasn’t interested in their products or roadmap, just their IP and engineering skills. Which means Apple has no interest in anything their currently making or about to make, despite Blam’s reasonable assumption that was the case. So it’s all about their design chops, or they really are just a bargaining chip. [EETimes via GigaOM] [...]

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