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4/23/2008
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Apple Reportedly Buys Chipmaker PA Semi

The company makes low-power PowerPC processors that could one day be used in the iPhone or iPod.

Apple has reportedly bought PA Semi, a maker of low-power PowerPC processors that could one day be used in the iPhone or iPod.

An Apple spokesman confirmed the acquisition to Forbes.com. Quoting another source familiar with the deal, Forbes said that Apple bought the fabless chip-design company for $278 million in cash.

While neither company made an announcement, Apple might address the purchase when it releases earnings Wednesday.

Santa Clara, Calif.-based PA Semi is known for taking the PowerPC architecture and adapting it for embedded markets. The startup launched chip samples last year.

Industry veteran Dan Dobberpuhl founded the 150-person company in 2003. Dobberpuhl is the acclaimed lead designer of the DEC Alpha series of microprocessors, the StrongARM microprocessor, and the first multicore systems on chip with the SIByte 1250.

The StrongARM processor was created by Digital Equipment and later sold to Intel, which has replaced it with the Xscale, a fifth generation of the ARM architecture. StrongARM was developed for PDAs, set-top boxes, and other consumer devices. The chip was used in newer versions of the Apple Newton, an early line of PDAs.

While Apple has yet to announce its plans for PA Semi, owning a chip-design company could give the computer maker control over the processing engine within its important iPod and iPhone product lines. The success of the iPod has been credited with helping Apple regain its standing with mainstream consumers over the last few years. The iPhone, on the other hand, is just as important in maintaining that "halo-effect." Apple expects to sell 10 million iPhones by the end of the year.

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