It's unclear what Apple will do with PA Semi, but the report indicates that the computer maker will target the chip maker's product for the iPhone or other systems.

Headquartered in Santa Clara, Calif., P.A. Semi was established in 2003 by industry veterans to develop a high-performance, low-power processor family. P.A. Semi is headed by Dan Dobberpuhl, the acclaimed lead designer of the DEC Alpha series of microprocessors, the StrongARM microprocessor, and the first multicore systems on chip with the SiByte 1250.

Last year, startup PA Semi shipped chip samples that demonstrate its claim of taking the PowerPC architecture's power consumption to new lows for a range of embedded markets.

Apple may use the company's technology in the company's set-top box. Apple has been pushing something called Apple TV.

''PA Semi would be great for high-end embedded applications," said Loring Wirbel, director of the EE Times Market Intelligence Unit.

''The PA-Apple relationship is no surprise. Apple considered acquiring the company in 2005,'' he said. ''Now, PA Semi is a company that is shipping silicon to a variety of customers. It seems wrong to take it off the market at this phase of the game -- though it wouldn't be the first time an OEM has taken a chip or software company off the market. Cisco is a repeat offender.''