Defense concerns may scuttle Apple-PA Semi deal

The Defense Department could potentially throw a spanner in Apple's plans to acquire chip design firm PA Semi, according to EETimes. That's because of reports that Apple is acquiring the company for its intellectual property and design know-how -- not for its current product line. If Apple is going to stop production of the chips, quite a few Defense projects could be impacted.

PA Semi's high-performance, low-cost PWRficient CPU is so good that the Defense Department bucked standard operating procedure and rapidly adopted the chip, EETimes says. Every branch of the armed services has programs dependent on the chip. A source told the journal that at least 10 defense systems use the PWRficient CPU, including one that forecast using 70,000 of the chips over the next 10 years.

"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.

"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.

EETimes reports that the company notified customers that it could not guarantee supplies of it chips because it was being acquired by an unnamed company, which "may be willing to supply the chip on an end-of-life basis, if it could successfully transfer a third-party license to the technology" (to quote EETimes) -- that license probably being for PowerPC.

"I don't know how a Lockheed Martin or a Raytheon would take the news that the part might not be available after a few months or perhaps two years," said the source. "Typically, these military program last for many years," he added.