Apple Buys Low-Power Chip Designer

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Apple has acquired a fabless semiconductor company, PA Semi, according to a report at

PA Semi designs energy efficient processors based on the Power architecture that Apple used in its Macintosh computers for many years before adopting Intel's x86 chips.

That gives some clue what Apple might do with the acquisition, said Alan Brown, research director at market analyst Gartner.

"The most likely product for Apple would be an ultra-mobile PC," he said.

But use in a future version of the iPhone isn't as likely, ARM has a very strong position, and the power consumption would be a challenge, according to Brown.

One of the main reasons that Apple switched to using Intel processors was heat dissipation. Intel offered mobile processors that had better performance without thermal issues that constrained the performance of the mobile Power chips that Apple had been using.

But the acquisition of PA Semi calls that Apple partnership with Intel into question, according to Brown. It would appear that Apple is planning to use an alternative processor, to allow greater differentiation in the market place,he said.

"Apple must have seen something in PA Semi it can't get from Intel, or it's cheaper for Apple to own the intellectual property," he said.

Apple's switch to Intel processors was facilitated by its parallel development of an x86 version of its Mac OS X operating system. It still develops Mac OS X and other software for older PowerPC-based Macs, as well as the newer x86 models, releasing the software as a "universal" binary that will run on both platforms.

PA Semi licenses the Power instruction set from IBM, so its chips are software compatible with the PowerPC chips Apple used.
PA Semi's dual-core PWRficient chip, launched last year, can deliver three to four times the performance of existing chips for the same energy consumption, the company claims. The processor is intended for use in embedded systems such as networking and storage devices, or telecommunications infrastructure.

Apple paid US$278 million in cash for PA Semi, the Forbes report said, citing a person familiar with the deal.

Apple representatives in Europe could not immediately be reached for comment. A spokesman for Bessemer Venture Partners, one of a group of U.S. investment funds that PA Semi lists as its owners, also declined to comment.

PA Semi was founded in 2003 by industry veterans including Dan Dobberpuhl, who while working at DEC led the development of a number of microprocessors including the T11, a design used in the Alpha processor. The company has about 150 employees.

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