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Apple to Acquire Chip Designer P.A. Semi for $278 Million

Forbes reports that Apple has agreed to purchase chip designer P.A. Semi for $278 million. The company, founded in 2003, focuses on sophisticated, low-power chips that could possibly be used in future models of the iPhone.

The decision to center the iPhone design around a chip that Apple could own marks a significant strategic choice by Apple Chief Executive Steve Jobs, and is aimed at ensuring Apple can continue to differentiate its flagship phone as a raft of competitors flood the market. According to a source affiliated with the chip company, Jobs and Senior Vice President Tony Fadell led the tiny group of executives who spearheaded the acquisition, which included negotiations that took place in Jobs' home.

P.A. Semi and Apple are no strangers to each other, as the chip company was reportedly courted by Apple to possibly provide Power-based chips before Apple finally settled on the switch to Intel.

Recent rumors have suggested that future platforms based around Intel's forthcoming Atom processor might be targeted for the iPhone, but Apple's acquisition of P.A. Semi suggests that this may not be the case.