Apple acquires boutique chipmaker P.A. Semi

BEIJING, April 24 (Xinhuanet) -- Apple Inc. has agreed to purchase boutique microprocessor design company P.A. Semi, according to a company spokesman interviewed by Forbes.com.

Steve Dowling told Forbes.com on Tuesday that P.A. Semi, is known for its design of sophisticated, low-power chips. The chips will be used in Apple's flagship iPhone and possibly iPod products as well.

The 150-person chip company was founded in 2003 by Dan Dobberpuhl, who was a lead designer for the well-regarded Alpha and StrongARM microprocessors developed by Digital Equipment in the 1990s.

"Apple buys smaller technology companies from time to time, and we generally do not comment on our purposes and plans," said Dowling. He declined to comment on the value of the deal, which a person familiar with the deal suggested was done for 278 million U.S. dollars in cash. Apple is due to announce its quarterly earnings Wednesday.

The decision to center the iPhone design around a chip that Apple could own marks a significant strategic choice by Apple Chief Executive Steve Jobs, and is aimed at ensuring Apple can continue to differentiate its flagship phone as a raft of competitors flood the market. According to a source affiliated with the chip company, Jobs and Senior Vice President Tony Fadell led the tiny group of executives who spearheaded the acquisition, which included negotiations that took place in Jobs' home.

Apple's choice is a setback for Intel which has been trying to convince Cupertino, California-based Apple to rely on Intel's chips -- particularly its latest low-power line up, called Atom.

Led by Intel Chief Executive Paul Otellini, Intel is developing a line of chips that it believes can become as central to handheld computing devices as its "x86" chips have been to the personal computer industry. Intel has said it aims to create somewhat different lines of Atom processors tailored to different classes of applications, such as consumer devices, low-cost notebook computers and set-top boxes. The first of these designs is slated to begin shipping by the middle of this year; another by year's end.

In February 2007, P.A. Semi debuted a 64-bit dual core microprocessor which the company asserted was 300 percent more efficient than any comparable chips. It consumes only 5 to 13 watts running at 2 gigahertz. Telecommunications, networking and wireless companies embraced P.A. Semi's work.

(Agencies)