ContactObsidian Software congratulates both Apple and Intrinsity on their acquisition deal that closed late last month. Obviously, the need for faster chips in mobile devices has Apple seeking to secure an advantage over competitors with this purchase. According to the New York Times, industry analysts speculate it’s Intrinsity’s technology that gives the iPad’s A4 chip its beefed up 1 GHz processing power. Intrisity’s patented technology provides more speed with lower power requirements, giving a significant edge over other ARM-compatible models. The NYT quoted Tom R. Halfhill, a well-known chip analyst for Microprocessor Report, saying Intrinsity’s price was in the neighborhood of $121 million. Certainly, this is an easy price for Apple to pay given that the iPad’s sales have outpaced the iPhone in the first month after launch by more than two to one.
As we rely on our mobile devices more as mini computers and less as simple phones, processing power becomes increasingly vital for companies like Apple. Nearly 90% of US households have a cell phone, yet voice minutes use has flat lined while more households increasingly give up their landlines. We’re still using our phones, but using them more and more for data and less for talking.
When Steve Jobs introduced the iPad, he referred to the A4 as the best and most complicated chip Apple ever designed. Intrisity worked closely with a division of Samsung Austin Semiconductor, said to be the largest chip manufacturing plant in North America that builds the A4 chips for Apple. Intrinsity CEO, Bob Russo, credited the partnership with Samsung for bringing visibility to the relatively small, 100-employee company based in Austin, Texas.
What does this mean for Austin?
This acquisition brings focus once again to Austin, Texas, a city increasingly important in the microprocessor field. Before this acquisition, Intrinsity was a David competing with Goliaths such as Texas Instruments and Freescale Semiconductor, both based in Austin. They were also going head to head with Intel Corp.’s Austin-designed Atom processor. Clearly when it comes to fast chips, there’s quite a lot going on in Austin, Texas.
Naturally, Austin is also becoming a hub for processor verification. Game-changing advances in chip performance call for equally nimble and innovative advances in processor verification. Obsidian Software and Intrinsity share a common passion for excellence and innovation, they were both founded in 1997 in Austin, and Mark McDermott, former VP of Engineering for Intrinsity sits on Obsidian’s Advisory Board.
Has the processor business turned?
The Intrinsity deal is the second chip acquisition for Apple in two years. Recall Apple’s purchase of PA Semi in 2008. Companies who design cutting edge mobile devices are increasingly choosing to do processor design and to some extent verification. Are these purchases by Apple part of a defensive strategy to stay ahead of emerging technologies funded by increasingly scarce venture capital? Or will we see a new generation of innovation come from the Intrinsity team that is now a part of Apple?
Companies such as Qualcomm, NVIDIA, and Marvell build their own unique ARM chips for their devices. Perhaps the line between device makers and chip makers will become increasingly blurred as both camps work to gain market advantage through increased vertical integration.
Further Reading:
IEEE Spectrum – Forecasting Apple’s Intrinsity Acquisition
Mac Daily News – Apple’s Intrinsity Deal is a Snapdragon Slayer
Austin Business Journal – Apple Inc. Acquires Intrinsity
Anandtech – Apple’s Intrinsity Acquisition: Winners and Losers
