Apple Quietly Acquires Semiconductor Startup

Amidst all of the hubbub at the annual Consumer Electronics Show this week, Apple was quietly at work bolstering their ranks in what some believe is a very important area; engineering, specifically chip engineering.  Apple confirmed this week that it completed its acquisition of Israeli based Anobit Technologies this week.  Apple did not disclose the terms of the deal, but it is believed they paid between $400 and $500 million for the semiconductor startup.

If you don’t follow technology closely or this segment of the business, you may be wondering why this is an important acquisition for Apple.  This is where I come in.  I will give you my perspective on why I think this is a strategic purchase Apple.  Only time will tell if they over paid, but the acquisition is still significant for two reasons.

First, Anobit’s flash memory controllers are a key component of all of Apple’s current leading products.  The iPod, iPad, iPhone, and the MacBook Airs all utilize this technology.  Anobit makes a key component that improves the speed and performance of flash memory chips (NAND chips for the technically inclined).  These chips are all used in the aforementioned Apple products.

Apple has been moving away from mechanical hard drives to the more robust and higher performing flash storage devices for its devices.  It is widely rumored that the MacBook and MacBook airs will begin only shipping with this sort of storage technology in the coming years. This acquisition would be very key in allowing Apple to put this sort of a technology into their MacBooks at a price point that is competitive and palatable by Apples customers.

The other piece of this acquisition that is strategic is that Apple just added about 160 chip engineers to their engineering ranks, which already numbered somewhere around 1000.  This is key as Apple designs its own chips; they don’t rely on AMD, Intel, or IBM to produce the chips that run their devices.  Apple designs their own chips and then outsources the production of those chips to semiconductor plants around the world.

It goes without saying that as it relates to computers; everything starts with the chip that is running the computer.  Apple in a sense got a two for one deal in this acquisition, and felt it was time to own a company to help them continue innovating and creating more mobile and post-pc devices for the next several years.