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April 23, 2008

Apple Buys Chipmaker P.A. Semi, Posts Second Quarter Results

By Mae Kowalke, TMCnet Senior Editor

In a strategic move likely intended to ease the manufacturing of custom parts for its iPod, Macintosh and iPhone consumer electronics product lines, Apple (News - Alert) is acquiring chipmaker P.A. Semi.

The news was first reported by Forbes.com, in an article quoting Apple spokesperson Steve Dowling as confirming the deal but declining to provide further details.
“Apple buys smaller technology companies from time to time, and we generally do not comment on our purposes and plans,” was all Dowling said. Given the tight-lipped nature of the company’s operations, that response was hardly surprising.
Forbes.com did, however, cite information from “a person familiar with the deal” who hinted that Apple paid about $278 million in cash for P.A. Semi.
P.A. Semi describes itself as a fabless semiconductor company that manufactures processors for embedded-computing markets. The company was founded in 2003. It is headquartered in Santa Clara, California and has a research and design facility in Massachusetts.
Forbes.com speculated that Apple’s acquisition of P.A. Semi likely will be a blow to Intel (News - Alert), which has reportedly been trying to convince Apple to switch to Intel chips for its iPod and iPhone product lines.
One likely reason why P.A. Semi caught Apple’s eye, Forbes.com said, is that last year the company introduced a 64-bit dual-core microprocessor it claimed was 300 percent more efficient than any comparable chips. Such a chip could prove useful in Apple’s products, especially as the company stays on its toes to continue differentiating its gadgets.
Apple on Wednesday posted second quarter financial results, reporting a 36 percent rise in quarterly profit attributed in large part to strong sales of its Macintosh computers and iPod media players.
Apple, Inc. (AAPL) shares closed on the Nasdaq Wednesday up 1.68 percent at $162.89, an increase of $2.69 from previous close of 160.20. In after-hours trading at about 5:10 on Wednesday, the company’s shares were priced down a bit, at about $156.
Mae Kowalke is senior editor for TMCnet, covering VoIP, CRM, call center and wireless technologies. To read more of Mae’s articles, please visit her columnist page. She also blogs for TMCnet here.

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