Friday, April 25, 2008

Apple's PA Semi buy may leave some out in the cold

Apple's PA Semi buy may leave some out in the cold

It appears that PA Semi's chip business may not have a place in Apple's future plans, which could spell trouble for the chipmaker's clients, including the Defense Department.

An EETimes report cites sources close to companies affected by the merger in reporting that Apple seems more interested in PA Semi's intellectual property and development side, rather than its chips.

In short, it likely means that production and development of these chips may be ended. The only hope would be for another company to pick up production, which has worried its customers.

The company's PWRficient processor has seen dramatic success in the defense sector, with devices from Lockheed Martin and Raytheon using the chip, as well as the Defense Department and US Military.

Insiders say this is rare for such a young company to have this sort of quick success. Typically, the defense industry is much less apt to adopt new technology until it has been through its paces.

PA Semi, according to EETimes sources, warned customers about two days before the announced deal that an unnamed buyer would be entirely disconnected from its product lines, which sounded off the alarms.

Supply of the chips were also said to have not been guaranteed in this note to clients.

Reports are suggesting that companies may ask the Defense Department to step in and urge Apple to reconsider, indicating the government may have something to say about the deal before it is through.