updated 09:40 am EDT, Wed April 23, 2008
Apple buys PA Semi
In an unusual deal, Apple has announced a decision to buy PA Semi, a microprocessor design company. An Apple spokesman, Steve Dowling, has declined to elaborate on the reasons or terms of the deal, except to say that Apple "buys smaller technology companies from time to time," and it does not comment on "purposes and plans." It is atypical however for the company to buy hardware firms, particularly as it has come to rely on ready-made components from a variety of manufacturers such as Intel, Samsung and Infineon. A source cited by Forbes claims the deal cost $278 million in cash.
PA Semi is 150-person company that designs low-power chips, and was founded in 2003 by Dan Dobberpuhl, formerly a lead designer on the Alpha and StrongARM chips created by Digital Equipment. The acquisition has thus fueled speculation that Apple intends to design custom processors for devices like the iPhone or the iPod, possibly as a means of distinguishing its platform, but potentially in order to retain high margins on the sale of each unit.
The connection between PA and Apple runs back several years, as at one point Dobberpuhl intended to design a chip based on PowerPC architecture; the switch to Intel CPUs for Macs ultimately ended any talks, but Apple is said to have watched the company closely ever since.
Forbes notes that it will likely be at least a year before Apple products with PA Semi chips are released. It is also rumored that while Apple is promising to support its acquisition's current customers, the company will eventually make PA Semi technology exclusive.