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April 23, 2008

business

Apple buys PA Semi

Posted Apr. 23, ’08, 4:45 AM PT by Derik DeLong
Category | Business

PA Semi Forbes has gotten word from Apple that they’ve bought PA Semi. Now, before you get confused like I did initially, they don’t make 18 wheelers. It’s disappointing.

No, the purchase is actually relevant as the company makes low power microprocessors that would be ideal in devices such as the iPhone or iPod. Apple could supply itself rather than rely on new found friends such as Intel. That next keynote appearance could be a little awkward.

Apple declined to comment on the details, but Apple apparently paid $278 million in cash. I hear it was in a nice Samsonite briefcase. Steve himself turned it to point at the PA Semi CEO, opened it, and said “I’ll take one microprocessor company please.” Seriously though, $278 million is the amount Apple supposedly paid.


4 Comments

Walt Author Profile Page said:

So.... No iTruck?

April 23, 2008 5:26 AM
Joe said:

$278M seems like an awful low multiple for a company which raised $100M in financing.

April 23, 2008 7:17 AM
CVBruce said:

Good one Walt.

I guess I don't quite get all of this. As I understand it, this is a chip design company, and not a manufacturer. Apple would still need to go to someone like Intel to produce the chip.

Currently, again as I understand it, Apple uses an Infineon chip that has not only the ARM processor, but all of the other functions necessary to run all GSM/EDGE/Audio/Video/digitizer/camera/Bluetooth/WiFi. So I don't see a big advantage in buying a firm that specializes in just the ARM processor.

I can see them wanting to move the radio functions (GSM/EDGE/) to a separate chip, and then the other chip would be the same in the iPhone and the iTouch. But this would mean more space, heat, and energy requirements.

I wish I understood this stuff better.

April 23, 2008 7:41 AM
Steve said:

Actually, PA Semi is what is known as a fabless semiconductor firm. Fabless firms specialize in the design and manufacture of chips; they outsource their manufacture to fabrication (hence "fab"-less) plants called semiconductor foundries. Lastly, it should be noted that Intel does not manufacture chips on contract. They design AND manufacture chips.

April 23, 2008 10:12 AM

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