PA Semi to design iPhone chips

Putting an end to speculation over its recent acquisition of PA Semi, Apple CEO Steve Jobs has confirmed that the $278 million deal was an investment in the future of its handheld products. Specifically, PA Semi will be tasked with designing “system-on-chips for iPhones and iPods.”

As the name implies, these “system-on-chips” will pretty much include everything from processor and memory to graphics and networking. Though it’s well known that Apple has played an active role in the design of chips from third-parties that go into its products, the acquisition of PA Semi will allow them to do a complete design in-house and take it to a chip foundry without disclosing its plans with any other mobile processor manufacturer.

Apparently, Apple believes this will help them innovate in a way that will differentiate its handheld products from a growing list of competing devices that will rely on technologies from the likes of ARM (and soon Intel) that are available to the broader industry.