More on Apple/PA Semi

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Following up on Casey's story this morning about Apple buying chip designer PA Semi, Valleywag (yeah, I went there...) brings another possible angle to the "yeahbuwhy?" table:

[The PA Semi chip's suitability for the iPhone] may well have nothing to do with why Apple bought the company. PA Semi's prize is its founder, Dan Dobberpuhl, a famed chip designer, and his 150-person staff. At less than $2 million per engineer, the price Apple paid is in the range Cisco pays to snap up talented engineers. With them working at Apple, Jobs can push established chipmakers to adopt its technical innovations and perhaps swap licenses for intellectual property. That's far more likely than actually switching away from Intel chips for the Mac; Apple actually explored using PA Semi's chips before choosing Intel. Even the iPhone, which would benefit more from PA Semi's low-power chips, is an unlikely candidate for an all-new chip design. Why? Volume economics favor Intel and Samsung so strongly that it's hard to imagine that a new microprocessor design from the PA Semi team could replace their wares. $278 million doesn't buy Jobs a rival chip; it buys him a tool to chip away at his suppliers' prices.

Of course, other angles remain actually using the chip design (though PA Semi does not manufacture their own chips, meaning someone with a fab, like Intel, would still be needed), licensing the technology/technologies to someone like Intel to produce proprietary chips to differentiate Apple offerings (and make life harder for Hackintosh'ers??), or just to beef up the patent portfolio and put a little fear into Intel to, as Valleywag put it, increase their bargaining position.

Personally, getting the engineers and licensing the tech makes the most sense to me at this point, but who knows if come Macworld 2009, El Jobso will pull the back off a 4G iPhone to reveal a brush-metal PA Semi chip glittering inside? What do you think?

Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, Review, Vector, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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More on Apple/PA Semi

3 Comments

Doubtless that must have made their little meet-up at Cassa Jobso real interesting. Ah, to have had a blog-fly on the wall...

Interesting read at Beyond3D (via Gruber):
http://www.beyond3d.com/content/news/634
So what's the point behind the acquisition, then? Well first of all, it likely represents a complete rejection of Intel's Atom architecture for ultraportables and mobile devices between the iPhone and the Macbook, such as a previously rumoured Apple Tablet PC. Secondly, it also represents a possible rejection of Intel for more embedded applications such as the Apple TV. And finally, it might mean trouble for Intel in the Mac Mini and Macbook Air segments of the market.