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6/26/2009
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Apple Increases Investment In British Chip Designer

Apple has been on a chip-design spending spree, buying PA Semi, a vendor of low-power PowerPC processors, and hiring more than 100 people with semiconductor expertise.

Apple significantly increased its investment in Imagination Technologies, a British designer of chips that handle graphics, video and other tasks in a variety of consumer electronics.

Apple increase its stake in Imagination from 3.6% to 9.5% with the purchase of 2.2 million shares at 1.4275 pounds per share, Imagination said Friday. In U.S. dollars, 1.4275 pounds equals about $2.36.

Apple in December 2008 bought 8.2 million shares of Imagination for a 3.6% stake. At the time, Apple paid the equivalent of 58 cents a share.

Apple is a licensee of Imagination's technology, which is likely to play a bigger role in Apple products in the future.

Imagination makes semiconductors for a variety of multimedia and communication applications, including digital radios, personal media players, car navigation systems, mobile Internet devices, ultramobile PCs, digital televisions, and set-top boxes. Apple products that could use such technology include the iPhone, iPod Touch, and Apple TV.

It's not the first time Apple has put its money into chips. In April 2008, the company bought PA Semi, a maker of low-power PowerPC processors. PA Semi designs the products, but manufacturing is outsourced.

Industry watchers believe Apple is moving deeper into chip design as a way to develop unique product features that can't be easily imitated by competitors.

Apple has been on a hiring spree that has added to its workforce more than 100 people with expertise in semiconductors. The employees include veterans of Intel, Samsung and Qualcomm.

In April of this year, Apple hired Raja Koduri, a CTO fresh from Advanced Micro Devices' graphics product group. It was the second such hire from AMD. Apple had also hired Bob Drebin, who was also a CTO at AMD. Both men had worked as engineer directors for graphics chipmaker ATI Technologies, which AMD acquired in 2006.

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