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Apple takes steps towards designing its own chips

Apple takes steps towards designing its own chips

Bad news for TriQuint Semiconductor, Infineon Technologies, Samsung, Broadcom, and other companies the sell computer chips to Apple: the electronics giant is taking steps towards designing its own chips.

Last year, Apple bought chipmaker P.A. Semi, a small chip company that specializes in low-power processors, or computer “brains.” Now Forbes reports that Apple is boosting its chipmaking know-how even more, by hiring leading designers from IBM and Nintendo.

Computer chips can be a commodity. Nearly every PC has a processor from Intel or its rival Advanced Micro Devices, for example.

But speciality chips can help differentiate one product from another — especially if they’re designed with a specific purpose in mind. A chip for a portable device, such as the iPhone, could be designed to preserve battery life, for example.

There’s big money at stake. Researcher iSuppli estimates that each iPhone 3G costs about $174 to make. Apple spends most of that money on components, such as chips, that it buys from other companies.

Even if Apple plunges into chip design, don’t expect the company to build a giant chip factory, called a fab. They cost billions. Apple would likely design the chips, then outsource their manufacture to a for-hire chipmaker, such as TSMC or UMC.

[Thanks: http://blogs.usatoday.com]