Fortune reports on the growing relationship between Apple and Intel since the announcement three years ago that Apple would ditch IBM PowerPC processors for Intel’s offerings.

Last year Apple asked Intel to supply a small, thin processor for use in a very thin notebook.

“That was the first time they actually worked together on a custom project,” says Tim Bajarin, president of the Creative Strategies consulting firm. “Before that, everything was pretty much off the shelf. As a result, the relationship grew even further.”

Initially Intel said they couldn’t help but remembered that they had shelved a project a few years before.

Years earlier, researchers had dreamed up a similar chip in a tiny package, but the idea had been put on the back burner after PC makers gave it a ho-hum reception. The concept just had to be dusted off. “We had that small chip package pretty much sitting on the shelf,” Rattner recalls. Within a year, Intel had updated it to meet Apple’s needs and delivered it in volume.

Apple used the processor in the MacBook Air announced at Macworld 2008, Intel’s chief technology officer Justin Rattner says that Intel is working with Apple on more projects that are “equally aggressive”.