Cupertino (CA) - Apple today confirmed that it will be purchasing PA Semi, a fabless developer of multi-core processors, for $278 million. Is there trouble ahead for Intel?

Forbes broke the story this morning after several days of rumors that Apple and PA Semi have been in negotiations. "Apple buys smaller technology companies from time to time, and we generally do not comment on our purposes and plans," told Apple spokesman Steve Dowling told the publication. Apple declined to comment any further but we expect to get more details during Apple’s Q1 earnings conference call later today.

Speculations about Apple’s motivation to buy PA Semi are already rife, with the most popular being that PA Semi’s technology could be used for future iPhone processors. PA Semi employs about 150 people and produced its first product in Q2 of 2007 - the 2 GHz PWRficient PA6T-1682M processor. The 65 nm, 200-million-transistor dual-core chip is said to consume between 5 and 13 watts of power. The processor integrates 2 MB shared L2 cache, two DDR2 controllers as well as the CPU subsystems such as transaction trace memory and I/O. Both cores have access to 128 KB dedicated cache as well as built-in acceleration engines, for example for TCP/IP and security computations. According to PA semi, the I/O subsystem supports eight PCI Express controllers, two 10-Gigabit Ethernet controllers and four Gigabit Ethernet controllers. The company claims that the platform can scale to 2.5 GHz and up to eight cores.

Previously, the processor was pitched as a potential rival for Intel’s Core 2 Duo and AMD’s Athlon X2 processors, which raises questions whether this technology is really suitable for an iPhone.

However, we are pretty sure that Intel will be talking to Apple about this deal. Especially since the company plans to sell Moorestown CPUs to Apple as iPhone processors beginning in 2010.

Source : Tom's Hardware