Wall Street Buzz: Apple Set to Design Chips for Its Own Gadgets

Apple Inc. is preparing to get into the chip design business, making processors to work in its highly successful line of cell phones and music players, according to a report in The Wall Street Journal.

The business paper reported today that Apple is hiring engineers and designers in the Silicon Valley area from chipmakers that have been laying-off workers recently. It wrote that the effort by the Cupertino, Calif., computer firm is aimed at extending the features of its handheld devices to stay one step ahead of its rivals.

Apple could possibly use custom designed chips in its hit iPod and iPhone lines to reduce power consumption and accelerate graphics capabilities, in order to bring advanced games to the tiny platforms, insiders told the Journal.

Apple recently hired Raja Koduri, formerly the chief technology officer of the graphics products group at Advanced Micro Devices Inc. Koduri started at Apple this week, following in the footsteps of Bob Drebin, who had held the same title at AMD and is also now working for Apple. Online job postings from Apple describe dozens of chip-related positions it is trying to fill, some with partial descriptions like "testing the functional correctness of Apple developed silicon," according to the Journal account.

A year ago, Apple acquired start-up P.A. Semi to acquire expertise to help run the increasingly sophisticated software on iPhones and iPods. "You can't just go out and buy the chips off the shelf to do that," Apple CEO Steve Jobs told the Journal at the time.

Currently, Apple uses custom-designed microprocessors based on chips from ARM Holdings Plc and manufactured by Samsung Electronics Co. in its cell phones.

Apple declined to comment to media outlets on today's report.

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