Is Apple ARMing the iPhone With Homemade Chips?

When Apple (Nasdaq: AAPL) quietly bought a small semiconductor company earlier this year called "PA Semi," the move sparked a storm of speculation. Was Apple looking for new low-power processors for its iPhone? Was it aiming to develop new processors for unannounced but rumored Mac tablets? Or was Apple just buying PA Semi to snag some top-notch engineers?

It turns out that one of those engineers, reportedly Wei-han Lien, the senior manager of Apple's chip team, let the PA Semi cat out of the bag this weekend by posting details of his job on LinkedIn, a professional and career-oriented social network.

The New York Times spotted a single phrase describing Lien's current job role at Apple on Lien's LinkedIn experience page this weekend: "Manage ARM (Nasdaq: ARMHY) CPU architecture team for iPhone."

The LinkedIn profile has since been removed from the site.

ARM Race?

Apple CEO Steve Jobs revealed in June that PA Semi was "going to do system-on-chips for iPhones and iPods," but he revealed very little detail on what kinds of processors the team would work on. At the time of the acquisition, PA Semi was producing low-power processors that were used by a number of military and government agencies. After the acquisition, they leaned on Apple to ensure that a steady supply would keep on coming.

As for ARM (Advanced RISC Machine) processors, three-quarters of the world's mobile electronics market utilizes ARM-based low-power consumption processors that have been licensed via ARM Limited.

If Apple develops its own ARM processors for the iPhone, it could possibly remove the need for a outside supplier, if not gain new advantages.

"The benefit is, if these guys can design an ARM-compatible processor that has better performance and/or power characteristics than the standard ARM processors they can license directly, then Apple could have an iPhone or other device using those chips that would have superior performance or battery life compared with others using standard ARM processors, and that would be unique to Apple and not easily copied by their competitors," Nathan Brookwood, principal analyst for Insight 64, told MacNewsWorld.

"The risk is, when they are done, if the product they have designed doesn't offer that much more than the standard RISC ARM processors you can license, then Apple would have spent a lot of money pursuing something that gives them no advantage or isn't useful at all," he explained.

No Slouches

Still, the brains behind PA Semi may be formidable.

"The PA Semi guys have a history of being able to pull this off -- they did it once with ARM back at DEC (Digital Equipment Corporation), they did it with the MIPS (Microprocessor without Interlocked Pipeline Stages) architecture when they started a company called 'Alchemy,' and they did it with the PowerPC processor when they were at PA Semi," Brookwood noted.

"So these guys are very very good at what they do -- they may be some of the best at what they do," he added.