Why did Apple buy Maxim's fab?

Apple car?

However, not everyone in the analyst community agrees that Apple will actually do anything with the fab it has just acquired.

Kevin Krewell, principal analyst at Tirias Research, told EE Times, "It is a little puzzling." He said, "It could be an indication that the secretive company wants to build devices that are patently unique and don't want to leak the technology to competitors."

Of course, "if the device, be it sensor or some other chip, goes into a high volume system like a iPhone or iPad, Apple would have to transfer the device technology to a foundry for high volume," he noted.

"But if the device is for a relatively low volume product, like the rumoured Apple car, then the fab would have enough capacity for prototyping builds and early production."

Jim McGregor, principal analyst at Tirias Research, remains cautious.

He told us, "Apple has a practice of funding new technology development and funding the capital investment in facilities as part of that effort. If you recall, Apple purchased a facility in Mesa, Arizona from First Solar for use with manufacturing Sapphire Crystal displays through GT Advanced." McGregor added, "Even though Apple scrubbed the project, the company still owns the facility and plans to use it as an IT centre."

In short, McGregor pointed out, "I would not read into this [Apple's acquisition of Maxim fab] that Apple is getting into semiconductor or MEMS manufacturing directly. The company invests for and through its partners."

Elsewhere in the world, some engineers are excited about the latest news.

One Chinese source—an entrepreneur and engineer—sent to us an unprompted email Tuesday evening, saying, "I was told the Maxim R&D fab will be put to use for MEMS sensor prototyping while the AUO AMOLED R&D fab will be used for wearable and smartphone panel prototyping. Very interesting!"

This source was combining Apple's Maxim fab acquisition with Apple's recently reported new lab in Longtan, northern Taiwan. A new team of R&D engineers Apple recently recruited from local companies is reportedly developing flexible OLED technology for new displays for use in iPhones and iPads, according to sources in Taiwan's LCD driver IC sector.

Apple being Apple, details of any recent actions remain in secrecy.

Pendulum is swinging back

On the other hand, these developments suggest something we've suspected since Apple bought PA Semi back in 2008: Apple has been methodically putting pieces together to build a vertical business model.

Semico's Feldhan agrees.

"The pendulum is swinging back," he said, from the lean and mean time when many companies in the electronics industry were busy shedding their fabs and product lines. Referring to the more than $100 billion chip companies have spent for acquisitions this year, Feldhan asked, "Why do you think they are doing all these M&As?" They want scale and scope, hoping to leverage that in negotiating with suppliers, and take advantage of their fabs and design teams, he suggested. Their motive for mergers is no different from Apple's.

Tirias Research's Krewell made a similar observation. "Both these developments—Maxim fab in San Jose and display technology lab in Taiwan—could be Apple dipping its toes into the semiconductor manufacturing business. Apple has enough money to fund or own a whole fab, but it's not Apple's core competence. This could be a start."

- Junko Yoshida
??EE Times U.S.

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