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Apple to Buy Microchip Maker P.A. Semi

The move prompts speculation that Apple will use the company for development of its iPhone and iPod products.

iPod chip

According to Forbes.com, Cupertino, Calif.-based Apple will acquire the boutique chip maker for an undisclosed amount speculated to be around $278 million in cash.

"Apple buys smaller technology companies from time to time, and we generally do not comment on our purposes and plans," Apple spokesman Steve Dowling told Forbes. Dowling did not comment on how much Apple was paying for P.A. Semi, but Forbes reports that a person close to the deal "suggested it was done for $278 million in cash."

P.A. Semi, Santa Clara, Calif., was founded in 2003 by Dan Dobberpuhl, designer of the StrongArm microprocessor and the SiByte 1250, the first multicore system on a chip. The P.A. Semi team has extensive chip-building experience, with executives that designed the Opteron, Itanium and UltraSparc chips.

P.A. Semi has 150 employees, and the company's Website says it has "developed from scratch a paradigm-shifting high-performance platform processor with breakthrough performance per watt."

According to Forbes, Apple was in talks with P.A. Semi three years ago when it was deciding whether to continue using PowerPC chips in its computers or to switch over to Intel's x86 chips. When Apple went with Intel, the relationship petered out.

Apple will announce its quarterly earnings on Wednesday at 5 p.m. ET.

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