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The iPhone maker contributed more than 10 percent of revenue in 2013, Pixelworks said in a regulatory filing on Wednesday.
Roth Capital Partners analyst Krishna Shankar said Pixelworks' revenue from Apple are likely contract licensing revenue for use of its technology and chips in future iPads, Apple TVs or 6-inch iPhones with 4K displays.
4K refers to displays with higher resolutions than HDTV and more realistic color.
The iPhone 6 is expected to launch in the second half of 2014.
Shankar said other companies such as Samsung Electronics (005930.KS), HTC Corp (2498.TW), Huawei Technologies Co LtdHWT.UL, Broadcom Corp (BRCM.O) and Qualcomm Inc (QCOM.O) may also license its video processor technology for their smartphone and tablet processors.
Shankar raised his price target on Pixelworks' stock to $10 from $6.
The company's shares rose to a seven-year high of $7.40. They were trading at $6.85 on the Nasdaq on Thursday.
Pixelworks develops video and pixel processing semiconductors and counts Sigma Designs Inc (SIGM.O), Silicon Image Inc SIMG.O, STMicroelectronics NV (STM.PA) and Texas Instruments Inc (TXN.O) among its competitors.
Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Don Sebastian