Apple and Intrinsity's Perspective

Historically, Apple has not had much luck with their semiconductor company acquisitions. In November 1999, they acquired Raycer Graphics for $15 million dollars, supposedly for the 3D graphics related patents that the company held. People continued to speculate for 2 or 3 years after this wondering when the products from this acquisition would replace Nvidia's role in Apple computers. Unfortunately, this never came to pass, and people from the Raycer acquisition just moved on to join companies like SGI and Nvidia. In April 2008, PA Semi was acquired for $278 million. Their claim to fame was a 64 bit dual core processor called the PWRficient. The analysts were greatly surprised at this acquisition since PA Semi's IP had no place in the roadmap of any of Apple's products (except, probably, the Apple TV) since its power consumption was too high at 25W. The consensus was that the purchase was made for the manpower with VLSI experience that PA Semi would provide to Apple's team for designing chips for future generation of products in the iPhone / iPod / iPad line. Then, again, most of the PA Semi engineers have since moved on from Apple to work in a startup named Agnilux (which was recently acquired by Google), and Apple has been forced to supplement the workforce with reputed chip engineers from other companies.

When seen in the above context, it is really easy to determine why Apple needed to acquire Intrinsity. Being the force behind the performance of the Cortex-A8 in the A4, it makes sense for them to acquire the engineering talent and the technology behind this. Not only would it improve the performance of the ARM cores in the future members of the A4 family (Intrinsity was supposedly working on hardening the FastCore version of Cortex-A9), it would also prevent the competition (read, Samsung) from utilizing this technology to make fast app processors for phones such as the Samsung Galaxy S.  As noted in the previous paragraph, Apple has never been able to retain the important employees from its semiconductor acquisitions. It remains to be seen how much of a leeway from the usual Apple work culture is given to Intrinsity after the acquisition, as this would probably decide how much of the talent actually continues to remain in Apple to contribute down the road.

From Intrinsity's perspective, the acquisition probably comes as a relief. As can be seen from the Intrinsity timeline on the previous page, the company has been reliant on a few big customers for revenue and had to get back to the venture capitalists for more and more funding every few years. A successful semiconductor company startup usually manages to become cash-flow positive after 4-5 years, and eschews further VC investment to prevent stock dilution unless their revenue stream fails to match up with their plans. Once a company goes past four or so rounds of funding, there is an increased pressure from the VCs to generate returns on their investment. There are two exit choices: one is to get acquired by a bigger company for the technology and patents, and the second is to go for an IPO. With Apple showing interest in the technology, and IPO not really looking like an option due to the lack of a sustained profit curve, there was only one way to go for Intrinsity. Now, with more than $100 million dollars invested, was it really a good exit for Intrinsity's investors? If MPR's sources (which Tom Halfhill stands by with conviction) are correct, at $121 million, the investors just about managed to get their cash back. Unfortunately, $20 - $30 million over 13 years is really not such a great return, particularly when the investment amounts are adjusted for inflation. On the other hand, if Apple managed to dictate terms, a purported purchase price of less than $50 mn would imply that the investors' money just went down the drain. However, the asset acquisition at least ensured that the current employees had their jobs saved by shifting to Apple. From Apple's perspective, $121 million or sub-$50 million really doesn't matter, since the amounts happen to be a drop in the bucket for a company with more than $40 billion in the bank.

From a technology perspective, domino logic has long been regarded with suspicion by many people because of the associated problems. Though speed and performance increase, the power consumption as well as integration with the rest of the design flow remains an issue. Fast14 technology doesn't advocate usage of the domino logic in all parts of the chip, but only in the critical path (slowest sequence of gates in the circuit which pulls down the operating frequency for the whole chip). This is done in order to minimize die area and power consumption penalties. As process geometries shrink, some engineers feel that leakage, noise and clock skew related issues become more and more difficult to surmount. Further, NDL technology (the traditional name given to Fast14) results in increased number of interconnects. Unfortunately, interconnects don't scale as well as transistors do when process geometries shrink. More time needs to be spent in fine tuning the layout to achieve timing closure and handling interconnect loads. So, it is quite possible that despite the automated methodology that Intrinsity possesses, getting a FastCore version of the Cortex-A9 in, say, the 32nm node, may take much more time, than, say, in the 45nm node.

Unlike the traditional processor market where Intel and AMD can take 2 years or more and use a lot of manpower to churn out a processor at a particular node, players in the application processor market often rely on being the first company to take advantage of a particular node. If the Intrinsity group's schedules slip, Apple might find itself in the back foot against competitors like Nvidia and TI with the Tegra and OMAP series respectively. Note that the A4 with Intrinsity's Cortex-A8 is actually up against Nvidia's Tegra 2 which already has the Cortex-A9 at the same 1 GHz (admittedly in TSMC's 40nm node). Samsung is expected to move towards the 32nm node around the same time that TSMC gets ready to implement 28nm, which Nvidia would presumably use. There is also the small matter of the difference in the manpower behind the Nvidia's Tegra group in charge of hardening the ARM processor and Intrinsity's. Then, again, Apple always has better software and marketing to paper over the cracks in the application processor. In that case, however, Intrinsity's purchase wouldn't have given them any more advantage than what they already possess.

Apple has long claimed that they needed to design their own CPU in the iPad series to decide where the exact performance push would go. With Intrinsity, they were able to get a fast core and split the hardening cost with Samsung. It is not exactly clear how Apple can customize the CPU any further than what Intrinsity would do as an outside job without holding an architecture license from ARM (MPR suggests that Apple also possesses an architecture license, though we are unable to confirm this from other sources). If Apple does go through the architecture license route, they are looking at a 4 year investment cycle (similar to what Qualcomm spent on the Scorpion core in Snapdragon). It is also not clear whether Intrinsity's knowhow includes architecture level manipulation of the Cortex implementations. It is definitely clear that the current Cortex FastCore versions didn't have any micro-architectural modifications, and was a cycle-accurate representation of ARM's original microarchitecture.

If Apple was hoping to cut down on the cost of hardening future CPU cores by purchasing Intrinsity, it doesn't seem like such a great decision keeping the above points in mind. On the other hand, if the aim was to prevent the competition from getting access to this technology, it may succeed to quite an extent. All in all, it can't be said that Apple's acquisition of Intrinsity is a slam dunk.

A Brief History of Intrinsity The Rest of the Industry


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  • ganeshts - Wednesday, April 28, 2010 - link

    @Mike1111, Thanks for your inputs.

    When I mentioned that 'MOST' of the PA Semi engineers had moved on, I referred to the top brass consisting of PA Semi's CEO / CTO / COO etc. A quick Google search reveals that all these guys had indeed moved on to Agnilux. As for the rest of the PA Semi employees who stayed on at Apple, I am sure they are no different from any other Silicon Valley VLSI engineers that Apple could hire since Apple doesn't seem to be using any IP / specific knowhow of PA Semi in their products.

    As for GlobalFoundries, yes, Apple could always shift foundries, but the acquisition of Intrinsity lessens this probability, in my opinion. Considering that Intrinsity engineers are very familiar with the Samsung process, it would probably increase development time if they were to shift to another vendor. Note that Intrinsity's technology is closely tied to the process and foundry. So, it is unlikely that Apple would take the risk of schedule slip. Of course, this is just a conjecture, and stranger things have happened in the industry. If I have left off some specific angle which would make Apple shift foundry allegiance, please do let us know :) I am very open to corrections.
  • MySchizoBuddy - Thursday, April 29, 2010 - link

    Correction. Apple isn't using any PA.Semi specific IP "that we know off". Apple is too secretive to draw conclusion that PA.Semi was a lost acquisition. Reply
  • ganeshts - Thursday, April 29, 2010 - link

    Well, this is the same thing that people were talking about when no Raycer Graphics products appeared under Apple's name even after 3 - 4 years of the acquisition.

    Many professional analysts ( and I am not one :) ) have long since beaten this to death, and I will put it down here again : "PA Semi's IP at acquisition time was a 25W ARM processor based chip. There is no product line that Apple currently has, which could be using this type of chip. If Apple indeed had planned on using PA Semi IP of some sort in any of their products, the best bet would have been in the iPad -- of which, rumors abounded towards the beginning of this year. This didn't turn out to be true. There has been no tangible benefit (except for engineering resources) to Apple from the PA Semi purchase yet -- even after 2 years of the acquisition"

    I don't find anything which would make me disagree with the analysts' conclusions.
  • Mike1111 - Thursday, April 29, 2010 - link

    If Apple is sticking with Samsung, any information out there what's Samsung's LP roadmap for 28nm (if they do half-node) and 22nm/20nm looks like? I couldn't find anything concrete (only that 32nm and 28nm will be rolled out this year - is that HP(L) or LP, risk or volume?). GlobalFoundries seems to be on an aggressive schedule, as is TSMC (although their problems with 40nm make me skeptical that they can really deliver 20LP in volume production in the third quarter of 2013 as announced).

    As for PA Semi: If Apple is really trying to develop its own CPU core (like Scorpion), then it's no wonder that they weren't involved in the A4. A custom ARMv7 architecture won't find its way into products until 2012 at the earliest. 2012 would also be the year when I expect a dual-core Cortex-A9 (or similar custom architecture) to come to the iPhone, so that would fit (because I don't think dual-cores make much sense for smartphones before available in 32nm/28nm).
  • ganeshts - Thursday, April 29, 2010 - link

    Except for TSMC's public roadmap (which, in my opinion, is something to save face while their 40nm fiasco continues), foundries usually put their roadmaps under NDA. So, it is not surprising that we are unable to find out information about Samsung's plan beyond 28nm.

    GlobalFoundries looks aggressive and acts aggressive because they want to attract customers (Remember that they are starting out completely new!).

    @ Mike1111, Yes, I agree with you on PA Semi possibly working on ARMv7 architecture (assuming Apple does have the architecture license). This custom architecture could be further accelerated using Intrinsity's technology too. This is exactly what Tom Halfhill suggests in Microprocessor Report dated April 26th, 2010.

    Note that Qualcomm licensed ARMv7 in 2005, and it took them till 2009 end to start shipping products based on this. If one assumes PA Semi team started this in 2008, it would take them the timeframe that you mention to get designed into a working phone or tablet. However, loss of the top guys from PA Semi would have definitely pushed this behind schedule. As I noted in the article, Intrinsity tech, if applied to this custom architecture, is only bound to delay this further.

    Just look at how the A4 Hummingbird designed in 6 - 8 months by Intrinsity seems to be better than the Snapdragon Scorpion which took more than 4 years! When Apple comes out with their version, I am sure a stand alone processor from ARM itself (like the off-the-shelf Cortex-A9's successor) would have better performance; That way, I am not sure Apple would be taking full advantage of Intrinsity's tech.
  • Mike1111 - Thursday, April 29, 2010 - link

    Thanks for the response!

    Regarding Samsung's foundry business: I couldn't even find detailed information on Samsung's 32nm and 28nm process, not just the stuff beyond 28nm. Is that information out there? I would be really interested in knowing when the 28LP volume production is scheduled to start. Early enough for the 2012 iPhone (AFAIK that would mean Q3/2011 or earlier)?

    Halfhill's Intrinsity article sounds good, but since I don't have a subscription I can't really access it. But in the part I could access he says that Intrinsity has already put more than 1 year into a Fast14 implementation of ARM’s Cortex-A9 dual-core processor. Interesting.
  • ganeshts - Thursday, April 29, 2010 - link

    Mike, an article appeared in ElectronicsWeekly just today:

    Summary from the above link: Looks like Samsung will offer 32, 28 and 22nm ; Q3 2010 is when 32nm volume production might start ; No hard dates provided for other nodes.
  • Mike1111 - Thursday, April 29, 2010 - link

    Thanks for the link!

    Q3/2010 for 32LP volume production is very good. Just risk production or 32HP in Q3/2010 wouldn't have suprised me.
    That means that a 32nm SoC in 2011's iPhone could be theoretically possible. Although, going from 65nm to 32nm in 2 years in a smartphone sounds too good to be true. And if Apple wants to continue to use the same SoC in the iPhone (Q2/2010) as in the iPad (Q1), it gets even more unlikely.
  • Mike1111 - Thursday, April 29, 2010 - link

    Correction: And if Apple wants to continue to use the same SoC in the iPhone (Q2/2011) as in the iPad (Q1/2011), it gets even more unlikely. Reply
  • Mat3zz - Friday, April 30, 2010 - link

    This article seems to imply that ATI used Fast14 in their GPU's. I'm pretty sure they never did. When ATI released the R600 series in 2007, it was asked of Eric Demers in a Beyond3D interview about Fast14 and he made it clear it wasn't in their product. Radeons haven't increased in clock speed much since then. If ATI paid Intrinsity, it was probably for nothing. Where's my Ghz GPU!? Reply

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