Apple CEO Steve Jobs personally killed the rumors that his company bought chip designer PA Semi to reduce reliance on Intel for Mac processors. The company will instead be working on system-on-chip designs for the iPod and iPhone, according to the New York Times.

Mr. Jobs stated "PA Semi is going to do system-on-chips for iPhones and iPods."

The move means Apple could be in a stronger position compared to its competition since it can fine-tune the processors in its handheld products instead of relying on the same chips other manufacturers use. The PA Semi purchase also plays into the company’s long tradition of controlling all aspects of a product’s design from hardware to software.

There’s no guarantee, however, that Apple will keep PA Semi focused just on its handheld devices. The Cupertino company is already at work on the next version of its Mac operating system, code named Snow Leopard, and will focus primarily on performance and reliability.

Grand Central, one of the new features in Snow Leopard, will help optimize performance by helping the OS more efficiently use available processors. Since performance is the name of the game in the next version of OS X, Apple could be leveraging PA Semi to help design chips for its Mac desktop and portable systems, which would give the company a potential leg up on other PC makers.

Apple isn’t saying what’s in store for its system-on-chip plans, but it likely means that we can expect more surprises from the company at future Steve Jobs keynote presentations -- and some of those surprises could include the Mac.