VentureBeat

When Apple purchased Silicon Valley-based chip maker PA Semi back in April, the rationale seemed clear: Apple would now be able to build its own microprocessors for use in its iPhone and possiblly iPod products. That was confirmed in June by Apple chief executive Steve Jobs himself, but it still wasn’t clear what kind of chips these would be. It seems the answer to that is ARM chips, according to an Apple employee profile on the business networking site LinkedIn, which the New York Times’ Bits blog happened upon.

Specifically, Wei-han Lien, who is the senior manager chip CPU architect for Apple, has listed that his role with the company is to “manage ARM CPU archtiecture team for IPhone.” Lien was one of the engineers who came over to Apple as part of the $278 million deal for PA Semi.

ARM is a type of processor that is common in the mobile industry because of its low power consumption. The current iPhone uses ARM chips believed to be built by Samsung. But by making its own chips, Apple can create fully customized ones for future iterations of its mobile devices.

This will undoubtedly also help Apple maintain secrecy about upcoming products. It’s possible that Apple could use the PA Semi team to construct a special chip for future mobile Internet devices, VentureBeat’s own Dean Takahashi speculated back in April. That could include something like the Mac Tablet computer that is rumored to be in the works. Though, for such a device an ARM chip may not be powerful enough and Apple may opt to use chips by Intel, which it users for its desktop and notebook computers.

The Bits’ piece goes further into the ramifications of Apple buying PA Semi, including speculation that the Department of Defense has been pressuring Apple to continue to supply it with PA Semi chips for use in the U.S. military’s missiles.

The iMissile. Coming soon to a war zone near you?

[photo: flickr/azrainman]

updated with info about VC backing

In a move with a lot of strategic implications, Apple is reportedly buying Silicon Valley chip maker PA Semi for $278 million, according to a report from Forbes.

I suppose this is only fair, since Apple ruined PA Semi’s original business plan. Founded by Dan Dobberpuhl in 2003, PA Semi started out designing PowerPC microprocessors for Apple’s low-power laptops. Then Apple threw a monkey wrench in that plan and switched to Intel.

PA Semi, which has 150 employees and as such is one of the biggest chip start-ups in Silicon Valley, adroitly switched its designs to target the networking chip market. It also had its eye on making chips for game consoles, though the timing wasn’t right for that.

Forbes suggests that Apple wants the PA Semi low-power chips for its flagship iPhone and possibly future iPod products as well. That means that Apple will no longer have to depend on outside suppliers such as Arm Ltd. and its various licensees. It’s also a blow to Intel, which has been trying to sell Apple on its low-power Atom chip and future generations of mobile-focused x86 computer chips.

[Update: P.A. Semi had raised $126.5 million in venture funding, including from Bessemer Venture Partners, Highland Capital Partners, TI Ventures, Focus Ventures and Venrock.]

PA Semi specialized in making high-performance low-power chips through techniques such as clock-gating. That technique inserts a gate in between different parts of the chip; those parts can then be isolated so that they can be turned off if they’re not needed. That helps save power. While some chips had hundreds of clock gates, PA Semi was designing chips with highly granular power controls and thousands of clock gates. Read the rest of this entry »

Montalvo Systems has been seeking a hoard of cash in its latest fundraising round, but the chip startup is dangerously close to running out of money, VentureBeat has learned.

Although it raised $73 million, the company has run into problems finishing a chip that will compete with Intel in the low-power portable devices market, a market where chip giant Intel has become increasingly competitive. The company grew to nearly 300 employees in Santa Clara and India, resulting in a big burn rate and forcing the company to go back to fundraising. (our past coverage).

“There are a lot of people and burning it quickly,” said one venture capitalist who received a pitch but declined to speak on the record. “No matter how much money you raise, it won’t last long. ”

Reached by phone, Montalvo CEO Matthew Perry declined comment. At this exact moment, I’m not sure of Montalvo’s status but I have heard enough to be able to say as much as I am in this story. One source told me the situation is fluid.

If Montalvo is unsuccessful in saving itself, that says a lot. It’s increasingly difficult to challenge Intel in the $30 billion x86 (Intel-compatible) microprocessor business, as Montalvo tried to do. It also shows that creating complex chips in this day and age is not an easy feat, even with tens of millions of dollars and hundreds of engineers. And it provides further evidence that venture capitalists are shying away from increasingly expensive semiconductor start-ups.

The company attempted recently to raise more than $100 million from investors but apparently has come up dry, VentureBeat has learned. Read the rest of this entry »