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Sun, Nov 08, 2009 - 03:24 AM EST  —  AAPL: 194.34 (+0.3099, +0.16%)  |  NASDAQ: 2112.44 (+7.12, +0.34%)

U.S. Department of Defense may take issue with Apple’s PA Semi acquisition
Thursday, April 24, 2008 - 08:53 AM EST

"Apple Inc. may have to face the ire of the U.S. Department of Defense following its planned acquisition of P.A. Semi Inc. The startup's PWRficient processor is designed into DoD programs in every major branch of the armed services, said one P.A. Semi customer who expects Apple will end production of the parts," Rick Merritt reports for EE Times.

"'We've had customers saying they are going to the DoD on this one,' said a source in one of the several companies making embedded computer boards with the processor," Merritt reports.

"The source said he is aware of more than 10 defense systems using the PWRficient CPU, one of which recently forecasted it will use 70,000 of the chips over the next ten years," Merritt reports. "The board company alone forecast it would sell $100 million in products based on P.A. Semi chips over the next four years. Users include defense giants such as Lockheed Martin and Raytheon, the source said."

"'I've never seen such fast adoption of a product in the mil/aero world,' said the source, who asked not to be named. 'Typically users in this area take a wait-and-see approach on new products, but that didn't happen this time,' he added," Merritt reports.

"P.A. Semi reportedly has about 150 employees and is being acquired by Apple for $278 million," Merritt reports.

Full article here.

[Thanks to MacDailyNews Reader "qka" for the heads up.]

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Apr 24, 08 - 07:56 am Comment from: S.Jobs

Well....maybe if you switch the entire DoD to Macs, we talk about how we can support you.

Apr 24, 08 - 07:59 am Comment from: chris

Apple's buying PA so they can keep Skynet from acquiring consciousness!

Apr 24, 08 - 08:01 am Comment from: Murasaki

I don't see why Apple would face the ire of the DoD.

I think Apple would probably agree just to keep supplying the chips and the DoD would be happy.

Apr 24, 08 - 08:08 am Comment from: Brian Allen

DoD was no say in a private company transaction.

Apr 24, 08 - 08:09 am Comment from: Dumb premise

This article is stupid. It says basically "What would happen if Apple walked away from $100 million in chip manufacturing sales? Oh No! The DoD would be real upset!"

Apple will either: continue maufacturing the parts and rake in the $100 million, or sell of the chip production part of P.A. Semi to another company willing to do so, and keep the design and prototyping assets.

Either way the DoD will get their chips, Apple will get remunerated for a valuable asset, and moronic writers at EE Times will continue to fill columns with idiotic hit-bait.

Apr 24, 08 - 08:12 am Comment from: Metryq

Darn! Steve's plan for world domination has been exposed.

Apr 24, 08 - 08:25 am Comment from: Macaday

For an interesting point of view as always:

http://www.roughlydrafted.com/2008/04/24/why-did-apple-buy-pa-semi/

Apr 24, 08 - 08:28 am Comment from: Shadowself

As someone who actually *is* involved in a project utilizing the PWRficient line, I have no problems with Apple acquiring PA Semi. With so many systems utilizing the chips either 1) Apple will be persuaded to continue the line of chips or 2) Apple will be persuaded to license the line of chips to another company who will then continue producing them. Either way Apple makes money and the DoD suppliers keep making their systems.

Absolutely nothing to worry about!

Apr 24, 08 - 08:30 am Comment from: Cubert

Apple should just call them up and say, "mission accomplished".

Apr 24, 08 - 08:44 am Comment from: Gupta Feldstein from Outsourcistan

Maybe Apple simply wants to be able to pressure the DoD to considering buying Macs? :D

Apr 24, 08 - 08:49 am Comment from: Famous Grouse

Apple can license the design to someone willing to build the chips for the military. This is a non-issue, just ignorant trolling.

Apr 24, 08 - 08:50 am Comment from: LiM

So what's the problem? It's a change of ownership.

Oh... ——> How're we gonna git some kickbacks?

Apr 24, 08 - 09:08 am Comment from: Nick Holla

I work for one of the mentioned defense contractors (and former apple employee!) in the article and I can say this would be dangerous because the same hardware that is used in missiles for missile shields is now owned by a company (Apple) that makes consumer products....this kinda stuff is kept away from non-allies. For example, Boeing recently busted a spy that was working for China, as he was giving them tons of blueprints and other information about hardware for satellites and planes....imagine if they could get a hold of how to make the processors....could be bad, very very bad. Esp if all they had to do was go to the local Apple store and purchase an ipod......

Apr 24, 08 - 09:22 am Comment from: iestynw

Nick Holla...

Yeah, just imagine if they got hold of how to make the processors...

It would be hell! They could make more power-efficient computers!
Oh no!!

And that boeing spy... china probably just wanted the blueprints so that they could make cheap copies of the hardware and sell it. They do that all the time with car designs.

They're never going to be enemies of the west. They get too much money making products from the west, and we save too much money buying those products!!

I don't mean to offend, but I just had to squeeze that zit...

Apr 24, 08 - 09:26 am Comment from: effwerd

Oh great, so Apple would now be a part of our glorious war machine? Ugh.

Apr 24, 08 - 09:27 am Comment from: Nonfab

PA Semi is a chip-design house. It does not have fabrication facilities. The current chips are not manufactured by PA Semi, but by other companies operating under license. Unless one of those companies (or an important PA customer) is an Apple competitor, there is no reason to end production, because it doesn't cost Apple anything. They can simply collect the license fees for as long as people continue to buy the parts. If Apple stops development of the PWRficient CPU except for in-house use, the customers that currently use the chip will be stuck with the current model and no upgrade path, but anybody who has been using Power PC CPUs should be used to that by now!

Apr 24, 08 - 09:41 am Comment from: Shhhhhh!

If any company understands the need for secrecy, it's Apple.

Apr 24, 08 - 09:46 am Comment from: Register or Login

Is Apple is trying to end the war in Iraq?

Wait till the tree huggers get a hold of this one.

Apr 24, 08 - 10:42 am Comment from: mactivist

When a company is purchased, the buyer has to honor any existing contracts for service; so if the DoD has a contract, there's no problem.

Apr 24, 08 - 03:59 pm Comment from: Sammer

Apple will just sell the current product line and cross-licensing (with a non-compete clause) to a third party.

Apr 24, 08 - 07:52 pm Comment from: Jamie

Well, Palluxo! reported the story 5 hours before you published it, see http://www.palluxo.com/2008/04/24/us-dod-may-question-apple-acquisition-of-pa-semi/

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