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Anobit acquisition could be the biggest purchase of a hardware maker in Apple's history

Apple, Inc. (AAPL) can't hide its love flash.  Apple is immersed in a over decade long passionate affair with NAND flash memory, which it uses for storage across all of its mobile devices and in its computer SSDs.

I. Apple Pulls an OCZ

Now Apple is reportedly in talks to absorb a major part of its flash supply chain, and is reportedly in talks to purchase Israeli flash memory fabless chipmaker Anobit.

Anobit is a small firm founded in 2006 in Herzeliya Pituach -- an affluent beach-side district on central Israel's Mediterranean coast.  Today the company operates subsidiaries in the U.S. and South Korea.  Its core business is the tiny chips that allow super-fast, reliable access to flash memory, flash memory controllers.

Apple already licenses Anobit's controllers for use in its iPhone, iPad and MacBook Air.  

Anobit wide

A good flash controller is incredibly valuable to SSD makers or companies who use flash components in their devices.  Just ask OCZ Technology Group Inc. (OCZ), whose SSDs have been dominating the enthusiast market, thanks to their slick Indilinx controller, which suffers little of the bugginess of LSI Corp. (LSI) subsidiary SandForce's controllers.

OCZ apparently found the South Korean controller maker Indilinx so invaluable that it bought it (and its 20 patents) for $32M USD in stock. This purchase was followed in turn by LSI's $322M USD acquisition of SandForce, a deal driven by SandForce's broad market base, which offset its poor controller stability.

Now Apple is expected to follow in suit, potentially folding in Anobit to prevent competitors from gaining access to its technology.  News of the deal broke [translated] from the the Israeli publication Calcalist.

Reportedly the acquisition price could hit as high as $400M-$500M USD, a boon for Anobit investors, who have thus far poured $97M USD in venture capital into the startup.  The acquisition would also grant Apple control of Anobit's 21 patents (and the 74 more currently in the submissions process).

II. Longevity, Performance Differentiate Anobit's Mobile, Enterprise Controllers

Thus far Apple's only past hardware acquisitons have been slightly smaller -- a $278M USD purchase of PA Semi in 2008, and a $121M USD purchase of Intrinsity in 2010.  If the purchase of Anobit proceeds, it would be the first major acquisition in the young tenure of new CEO Tim Cook.

Anobit has a very valuable specialty, which could drive Apple to make the purchase.  Reportedly, its technology for detecting "bad" memory cells in MLC (multi-level cell) flash memory is the best in the industry.  That allows cheap MLC to replicate the typically far-better endurance of expensive SLC (single-level cell) flash.  Long-term longevity is still a concern for flash drives, so this is a very valuable technology.

That comes in handy for Anobit's enterprise offerings, which promise "4 Terabytes write per day for 5 years".  With Apple increasingly deploying storage-heavy large-scale data centers to support technologies like the iCloud, this could come in handy.  If the reliability issues could be removed, Apple could switch its servers over to using solid state drives (flash prices allowing) removing one more piece of the latency equation for its cloud users.

iCloud plus Anobit
Anobit's enterprise-ready SSD controllers could give a boost to Apple's iCloud.

The core specs on Anobit's embedded controller (used in the aforementioned MacBook Air, iPad, and iPhone) are pretty sweet to:
  • 666 MB/s data transfers
  • Works with up to 256 GB / 16 dies of NAND
  • "Ultra low" power consumption
  • Support for 20nm and sub-20nm NAND
  • Dual host interface (provides faster data piping to the rest of the system)
Anobit claims its controller is the "highest performance" tablet or smartphone flash storage controller.  We're sure some other companies would disagree with that assessment, but it's at least safe to say that Anobit is no performance slouch.

Anobit is a fabless firm, which means it lacks chip production capacity of its own, instead paying third parties chip fabricators like GlobalFoundries Inc. to actually put its proprietary designs onto chips.

We'll keep you updated if Apple goes through with its reported plan to fold in this crucial piece of its flash supply chain.

Sources: Calcalist [Translated from Hebrew], TechCrunch



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RE: The whole stack
By Tony Swash on 12/14/2011 7:54:37 PM , Rating: 0
quote:
Is your penis still in Steve jobs ass.


Talk sense to a fool and he calls you foolish.
  - Euripides


RE: The whole stack
By spread on 12/15/2011 1:59:46 AM , Rating: 2
quote:
Talk sense to a fool and he calls you foolish.

- Apple Service Manual 2010; Dealing with Dissent, Ln63


“So far we have not seen a single Android device that does not infringe on our patents." -- Microsoft General Counsel Brad Smith

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