“Just ahead of its recession defying, record setting Q2 2008 earnings reports, Apple revealed plans to buy PA Semi, a chip designer specializing in processors based on IBM’s Power architecture,” Daniel Eran Dilger writes for RoughlyDrafted. “This news sparked a flurry of confusion from observers: why is Apple getting into the semiconductor business after partnering with Intel in its Mac systems, aligning with ARM licensees for its mobile WiFi iPhone platform, and particularly after decisively migrating away from PowerPC in 2006?”
“Apple’s acquisition target isn’t a chip manufacturer. As a ‘fabless’ chip designer, PA Semi (short for Palo Alto Semiconductor) only develops chip designs that are actually built by other companies,” Dilger explains.
“PA Semi licensed IBM’s Power architecture technology to design its PWRficient series of 64-bit processors suitable for use in applications from desktop computers to server storage controller backplanes,” Dilger reports.
“EETimes reported that just two days prior to the announcement of its purchase by Apple, ‘PA 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,'” Dilger reports.
Dilger reports, “The report then flatly reiterated that ‘PA Semi customers were told the acquiring company was not interested in the startup’s products or road map, but is buying the company for its intellectual property and engineering talent.'”
Much more in the full article here.
[Thanks to MacDailyNews Reader “Brawndo Drinker” for the heads up.]
i think these guys are known for designing fast chips that use little power. Seems like a good move if the future is ultra portables
Intellectual property… is my guess.
“i think these guys are known for designing fast chips that use little power.”
Well, not for now… their chip uses 5 watts when the one of the iPhone uses 2!!!
Yet again I pop up to remind you that Apple inc. knows what you need long before you know you want it.
Keep the faith Applelytes!!!
ya but i think that chip was running at 2ghz if i remember right
The full length article is long but very informative. A good read.
Daniel is a great writer and astute Apple observer.
Apple doesn’t frivolously buy ‘assets’ that won’t help the company in some way (i.e. Final Cut, Logic, Shake… or, for a negative example: M$ / Yahoo).
In hindsight, it seems that every Apple acquisition has had some sort of strategic importance to where Apple wants to position itself as a company.
I would be willing to bet that the purchase of PA Semi will yield some amazingly kick ass results in the next few years… get ready to buy more stock.
MaWo: ‘economic’. As in:
“We’ve had one of these before, when the dot-com bubble burst. What I told our company was that we were just going to invest our way through the downturn, that we weren’t going to lay off people, that we’d taken a tremendous amount of effort to get them into Apple in the first place — the last thing we were going to do is lay them off. And we were going to keep funding. In fact we were going to up our R&D;budget so that we would be ahead of our competitors when the downturn was over. And that’s exactly what we did. And it worked. And that’s exactly what we’ll do this time.”
— Steve Jobs speaking with Fortune senior editor Betsy Morris, March 07, 2008
“ya but i think that chip was running at 2ghz if i remember right”
That’s 2GHz dual-core!
Look in the brains of Steve! What will he leave us in 10 years from now.
All Apple products with PASSD.
A hughe ground database.
Apple’s own satellite-system
Apple’s own telecom-system
Nomore software on your Mac, only start up and find it in Safari.
And…… Google & Apple, twee handen op één buik!
Apple’s not interested in building chips; Apple’s interested in controlling chip design. That’s what Apple did with Motorola and IBM – Apple had to take on chip design because Moto and IBM weren’t interested in desktop PCs; they wanted imbedded and server-type processors.
One of the reasons Intel was so hot to get Apple as a customer was to get the benefits of Apple’s chip design teams. Apple owns a lot of technology which has made chips use much less power than traditional (older) Intel chips.
Apple’s protecting its position and continuing the business of designing low-power, highly efficient chips. Apple doesn’t need to (and won’t) produce the chips, but it can license the technology to Intel or any other chipmaker to serve Apple’s interests.
Say Apple develops new technology (or maybe PA Semi already has) which significantly reduces the power consumption of a mobile computer. Think of the advantage Apple could have with the iPhone if iPhones used 1/2 the power of anything from LG, Nokia, etc. And Apple wouldn’t have to share, because Apple wouldn’t rely upon licensing its technology to make money.
I think we are going to se some specialized co-processors built into apple products. It will be seamless with OSX. This will give Apple hardware running OSX an even greater advantage over the Dull box companies running generic hardware. Speck out the same processors etc, only the Mac with these special co-processors will be many times faster. Apple already does this with Core technology, handing things off to graphic cards etc, so why not just build the chips right into the Mother board.
Finally. Daniel Eran was the only person I wanted an explanation from.
I should have read the full article before I wrote that! Ha! Guess the author has the same ideas.
iPhone has 3 chips in it. Desktops sometimes 2, but mostly one that is meant to do the bulk of processing. What if this is related to using multiple smaller chips in a product that allows you to spread the computing load to more processors? Low power chips that don’t require fans. The resulting iMac would be as thin as an iPhone.
I believe iPhone ushered in something new at Apple beyond a single product. It required a lot of out of the box thinking that could have major implications for computer design.
Here’s hopin’.
As reported on January 31 of this year:
“Intel (NSDQ: INTC) has reportedly sold a version of the miniaturized Core 2 Duo processor in Apple’s recently released MacBook Air to other manufactures, which could then build Windows-based competitors to the ultrathin and light notebook.”
I still think Jobs feels he was double-crossed by Intel and this PA Semi deal is way to let Intel know that he didn’t like it. Would Intel have made the MB Air chip without the influence of Apple? Don’t think so. Both Jobs and Intel’s chief got up on stage and announced that the chip was result of effort from both companies, and then Intel turns around and offers the chip to Apple’s competitors. Yeah, that’s the kind of partners you want. Intel’s chips have been a help to expand the Mac desktop and server lines, but Intel damaged its opportunities in other Apple products with that move.
I actually disagree with Spark. Let’s be all ‘grassy knoll’ about this. Come on, you know you want to. Is PWRficient architecture a problematic competitor for Intel’s Atom? But they’re not allowed by Monopolies and Mergers (Anti-Trust, I believe you call them) to gobble it up. So they get their new chums at Apple to do it for them?
Hmmm.
Or maybe I’m just being a touch paranoid…
Buying PA Semi: $300 mil
Keeping Intel on its toes: Priceless
Daniel Eran has nailed it, I think. He is easily the most intelligent and perceptive writer on the Mac scene in my view. Plus, he writes very well. His argument that Apple is after differentiating hardware features (not the CPU but ancillary chips) makes sense to me. All the other pundits with their predictions that Apple was going to abandon Intel (“Apple to Intel: Atom Schmatom” (Information Week); Apples Disses Intel’s Atom” (Ars Technica), etc) and use the PWRfient 2GHz PA6T-1682M chip in everything from desktops to iPhones to refrigerators made no sense to me. This does. Now if we could just clone him.
I’m convinced that this is about more than getting better parts for the iPod and iPhone. The last company that Apple spent hundreds of millions for was NeXT.
Apple can afford to develop a whole new CPU architecture, and having just gotten the leader of the DEC Alpha project aboard, I think that SJ is looking a few years ahead here.
-jcr
Intergrated chips on the iPhone? Maybe these guys can help get the Video iPhone to market sooner.
“A-List people hire A-List people; B-List people hire C-List people; C-List people hire…” – Want to know how Apple works, look no further than one of the most famous quotes from Jobs to understand why Apple can compete. Others may pay lip service, but Apple really seems to value talent more than hardware and software. Just look at what they can do with the same BSD OS, the same digital music concept, the same Intel chips and ARM powered handhelds. Apple has some of the brightest engineers. They’re like F1 race car drivers and mechanics; it’s not just the car or the parts, give them anything and they’ll drive circles around you. And Apple spend more percentage of their budget on R&D;than most so-called tech company. Chip or not, Jobs knows his investment in bright talent will payoff somewhere down the road somehow.
For me, January 9 2007, when the iPhone was introduced, still serves as a reference point, a summary of what Apple is going to be.
i) make “a leap-frog” product.
ii) “…skate to where the puck is going to be and not where it has been”
iii) and for cohesion and in avoidance of delays, copying, frustrations, etc, …”those who are interested in software must make their own hardware”.
In addition,
iv) the current SDK
v) an addition of a gem-pool of 150 R&D;talents overnight ….
“Are you getting it?, “No cripple stuff”, should be expected.
Thank you Dan.
another amazing article from an amazing tech-writer. and so fast. really impressing. i really hope that this guy is earning more money than all the clueless pundits and analysts combined. but wait, i must be dreaming.
Its all about performance while embedded.
Wink, wink. Nudge, nudge.
Is your processor a goer? Does it like to take photos?
Wink, wink. Nudge, nudge.