Apple's Plans for P.A. Semi? Not Interested in the Chips?

[MacRumors]

Earlier today, the news came out that Apple was acquiring chip designer P.A. Semi for $278 million. In February 2007, P.A. Semi debuted a 64-bit dual core processor which claimed to be "300% more efficient than any comparable chips" running at 2GHz and consuming 5-13 watts of power.

While the news generated speculation that Apple might use P.A. Semi's low power PowerPC chips in future iPhones or iPods, Beyond3D points out that these chips require far more power than can be expected for use in the iPhone or iPod.

Instead, EETimes provides some additional insight into Apple's motivations on the acquisition. According to comments made directly to P.A. Semi's customers, Apple is "not interested in the startup's products or road map, but is buying the company for its intellectual property and engineering talent." In fact, P.A. Semi also told customers that they would be unable to guarantee a supply of its chips in the future.

As it turns out, this may cause some resistance to the acquisition, as P.A. Semi's chips are reportedly used in a number of ongoing Department of Defense projects.



Article Link

[theheadguy]

I'd love to see something out of this, but I doubt we will see anything noticeable...

So no biggie imho...

[tothecore]

there's always an agenda... time will tell their motivation for this move. 200+ million... better be good!*


*sure it will be

[SkippyThorson]

Ah America...

Department of Defense > Apple Inc.

[hankolerd]

or maybe it is for the new and coming macbook touch later this year

[stagi]

Thats a lot of money for some engineers.

[biggd]

why wont they use the chips

[asdavis10]

DoD can't stop the Apple juggernaut. LOL

[Kwill]

Originally Posted by biggd

why wont they use the chips

Biggd, I sware if you don't smarten up your next computer will be a Hackintosh

[QuarterSwede]

If PA Semi is a defense contractor, all Apple has to do, if they buy them, is to fulfill the contract. Basically, Apple just has to make sure the project(s) PA Semi's team is/are are currently working on continue until the end of the contract. Defense contractors get bought out all the time in the middle of contracts.

[localoid]

Originally Posted by stagi

Thats a lot of money for some engineers.

Actually the article says the money is "for its intellectual property and engineering talent", e.g., engineers and ideas. It's not that uncommon for an intellectual property (IP) portfolio to be worth $1-billion.

[biggd]

Originally Posted by Kwill

Biggd, I sware if you don't smarten up your next computer will be a Hackintosh

yes yes, but truely can you tell me why??

[Stuart in Oz]

Apple (Steve) are just investing in true mobile computing being the next big wave. Remember that iPhone/iPod Touch are only starting points for this - like the original iPod was waaaaaay back in the early parts of this decade for the music player market.

Now that the game is moving into this new area (and Apple are really leading the industry by a country mile already) Steve's core value comes into play - 'People who want to write really good software should build their own hardware'.

Well, buying this firm brings Apple Dan Dobberpuhl - the Steve Jobs of the processor design world. He's brilliant, unconventional and driven to produce processor designs that break new ground in low power computing - a crucial part of mobile computing.

I imagine the conversation went something like this: "Dan, you've done great work with your own firm, but we know you only had 20 or 30 million dollars to develop with. We think you could do even greater work with Apple - so how about we buy your company so you get rewarded for all your hard work there and you come to work for us. Oh, and we'll give you a budget of $500 million dollars and all the staff and facilities you want to design the best chips you've ever made'.

There aren't any barriers to Apple designing their own chip for their mobile devices - it's a different market to desktops. No-one really cares if their iPhone has an Intel chip or a proprietary one because all the software is tied to the platform anyway. The people who buy an iPhone don't ask 'what chip drives it?'. They ask 'is it smooth when I scroll?'.

[CWallace]

Originally Posted by QuarterSwede

If PA Semi is a defense contractor, all Apple has to do, if they buy them, is to fulfill the contract. Basically, Apple just has to make sure the project(s) PA Semi's team is/are are currently working on continue until the end of the contract. Defense contractors get bought out all the time in the middle of contracts.

Or more likely Apple will spin-off the actual chip fabrication business and sell it (perhaps for more then what they paid for the company) whom will continue to build the chips for years (or even decades) to come for the DoD and other customers.

[EagerDragon]

Originally Posted by tothecore

there's always an agenda... time will tell their motivation for this move. 200+ million... better be good!*


*sure it will be

pocket change.

[stanleybostitch]

My understanding is that there is no fabrication business here -- they outsourced this. Only design.

[LaDirection]

Originally Posted by MacRumors

As it turns out, this may cause some resistance to the acquisition, as P.A. Semi's chips are reportedly used in a number of ongoing Department of Defense projects.

M1 Abraham BattleBook next Tuesday.

[shawnce]

Originally Posted by CWallace

Or more likely Apple will spin-off the actual chip fabrication business and sell it (perhaps for more then what they paid for the company) whom will continue to build the chips for years (or even decades) to come for the DoD and other customers.

P.A. Semi has no fabrication business but Apple could sell and/or license rights to the designs to a 3rd party so the needed parts can continue to be manufactured.

[pilotgi]

Yea, this Dan Dobberpuhl guy sounds like one of the best microprocessor designers on the planet. And now he works for Steve Jobs, just like Jonathan Ive and John Lasseter (now with Disney).

All that speculation about Apple going back to PPC is just silly. This is just a matter of Steve Jobs hiring the best talent to realize his own vision.

[lancestraz]

Originally Posted by biggd

why wont they use the chips

Cause Apple is out of dip.

[Sun Baked]

Hmm... Apple still has a lot of IP in their tech portfolio and likely are able to renegotiate licensing arrangements expired or near expiring rather easy (aka, throw cash at it) compared to the smaller company.

Charting a new course is expected ... they likely have a really good idea of what they want, grabbing the talent to execute it in house is probably another good idea -- especially if they can market the chip and spread out the R&D expenses.

But with the 1x billion in the bank, a $500 million tech R&D write-off wouldn't be too difficult for Apple to swallow.

I wouldn't be too surprised if they ditch the PPC core for the ARM core, or even re-up the PPC contract to keep the DoD happy.

[hankolerd]

Originally Posted by LaDirection

M1 Abraham BattleBook next Tuesday.

haha

[twoodcc]

well i must say, i'm kinda disappointed that they aren't interested in the chips

[Analog Kid]

Thinking Apple was going to use PA's current lineup of parts was silly-- if you like the parts that exist you buy the parts, not the company. Thinking Apple bought PA just because it was an easy way to hire some engineers is equally silly-- Apple could have poached guys out of that company for a lot less money.

IP? Only if Apple is planning to build its own chips, which it clearly plans to do, and it plans to do it with the talent from PA Semi pursuing designs very similar to what PA was already doing.

So really, the distinction is moot. Nobody thought Apple was going to put a 20W chip in the iPhone. They want one just like it but at half a watt.

Originally Posted by Stuart in Oz

I imagine the conversation went something like this: "Dan, you've done great work with your own firm, but we know you only had 20 or 30 million dollars to develop with. We think you could do even greater work with Apple - so how about we buy your company so you get rewarded for all your hard work there and you come to work for us. Oh, and we'll give you a budget of $500 million dollars and all the staff and facilities you want to design the best chips you've ever made'.

Best I heard was when Jobs recruited some guy out of PARC: "Everybody tells me you're great, but everything you've done so far is crap. Come work for me."

Originally Posted by Stuart in Oz

There aren't any barriers to Apple designing their own chip for their mobile devices - it's a different market to desktops. No-one really cares if their iPhone has an Intel chip or a proprietary one because all the software is tied to the platform anyway. The people who buy an iPhone don't ask 'what chip drives it?'. They ask 'is it smooth when I scroll?'.

You want an established architecture. Users don't care, but developers do. Use Intel/PPC/ARM/MIPS and you have a working compiler. Go proprietary and all bets are off.

Originally Posted by CWallace

Or more likely Apple will spin-off the actual chip fabrication business and sell it (perhaps for more then what they paid for the company) whom will continue to build the chips for years (or even decades) to come for the DoD and other customers.

PA Semi doesn't have a fab business. They're "fab-less". They design 'em and send the masks off to China or Taiwan to be manufactured.

Originally Posted by pilotgi

All that speculation about Apple going back to PPC is just silly.

That part isn't silly at all-- x86 is not what you want running your low power device. ARM is struggling to scale up. PPC might just find itself in the sweet spot.

[chickenninja]

if the power consumption of this chipset rivals the intel chipset, and apple is committed to intel, then it would be in apples interest to make sure that no-one outdoes intel, because if they outdo intel, then they also outdo apple.
apple may also have purchased this company as a bargaining chip in its relationship with intel, "we dont need you intel since we own this other chipmaker, so cut yr price or loose your deal". this company may also have some unknown technology apple was after. and even though apple is on an intel architecture doesnt mean they cant use this technology. Theres allot more than just processor in a computer, they could use this in the airport card, or the north/south bridges, all kinds of things.