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In Major Shift, Apple Builds Its Own Chip Design Team

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In a major strategy shift, Apple reportedly has begun boosting its capability to design its own computer chips in an effort to create exclusive features for its products. Apple has been hiring people from different areas of the semiconductor industry, including engineers to create multifunction chips used in cell phones. The internally developed chips could be used to significantly reduce the power consumption of the iPhone and iPod Touch devices, and possibly add graphics circuitry to help its hardware play realistic game software and high-definition videos.

Apple's new focus on chip manufacturing also is an effort to share fewer details about its technology plans with external chip suppliers, sources say.

People familiar with Apple's plans say they do not expect Apple's internally designed chips to become available until 2010 at the earliest. The new approach represents a significant break from the traditional approach among large electronics companies to outsource the development of chips and other components to external suppliers. Sources say engineers from P.A. Semi, which was bought by Apple, will develop ARM-based chips that could improve the performance and battery life of Apple's mobile devices.

From The Wall Street Journal
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