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Apple Almost Bought A Semiconductor Company But Didn't: Why Did It Fall Through?

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Apple Almost Bought A Semiconductor Company But Didn't: Why Did It Fall Through?

Apple Inc. (NASDAQ: AAPL) continues to make news in the semiconductor space, as JPMorgan's Rod Hall noted the company had been considering a purchase of Imagination Technologies LLC.

Earlier this week, news broke that following a seven-month decline, Apple chip production is finally on the rise. Furthermore, the company has recently made a series of moves indicating a greater emphasis on chips and related technology, according to Forbes.

Apple And Imagination

Despite admittance that the company had been in talks to acquire Imagination, Apple announced in a brief statement that it does not plan to make an offer.

According to Hall, Apple's statement read, "We had some discussions with Imagination, but we do not plan to make an offer for the company at this time."

Hall now views this information as "further evidence" that Apple is interested in the semiconductor space and "owning every key piece of semiconductor technology in its devices."

Related Link: Apple Chip Production Finally Improving After 7 Months Of Decline

The analyst added that JPMorgan believes "Apple licenses Imagination's graphics core design for it's [sic] A-series chips."

According to a Forbes piece on Tuesday, "Apple has been ramping up its chip capabilities for years. In 2008, it acquired chip startup PA Semi. The talent from that company eventually led to Apple building its own CPU cores. Apple has also opened up a laboratory for developing LCD and OLED screen technology in Taiwan, according to a Bloomberg report from last year.

"Apple also recently paid $18.2 million for a 70,000-square-foot chip fab that in San Jose, as reported by the Silicon Valley Business Journal."

At this time, JPMorgan views this as a "neutral impact," and currently holds an Overweight rating on the stock.

Latest Ratings for AAPL

DateFirmActionFromTo
Jan 2021Cowen & Co.MaintainsOutperform
Jan 2021Morgan StanleyMaintainsOverweight
Jan 2021BarclaysMaintainsEqual-Weight

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