Intel factory to make ARM-based smartphone chips

Intel has announced that one of its factories will start making smartphone chips based on designs by the UK-based firm ARM.

LG has been announced as the first client to take advantage of the tie-up.

Intel and ARM are often perceived as being rivals. Intel's x86 chip architecture dominates the PC sector while ARM-based chips are used in most phones and tablets.

But the two said they expected the move to be "mutually beneficial".

"[I] am wowed by moments of cooperation that redefine the industry landscape," blogged Will Abbey, an executive at ARM.

"This agreement is one example of that and will deliver immense value to the design ecosystem and ultimately to our partners."

Intel first began making processors for other semiconductor manufacturers just over three years ago.

Its output included computer chips produced for a firm called Altera that incorporated some of ARM's technologies - Intel went on to acquire Altera last year.

But the latest development marks a deeper relationship between Intel and ARM.

The Californian firm said customers would be able to combine its ability to make 10-nanometre transistors - which promise performance gains over the existing 14nm tech currently used in high-end phone processors - and ARM's most advanced designs.

ARM does not make physical products itself but instead licences its inventions to others, who then customise the designs.

The partnership poses a challenge to Samsung, GlobalFoundries and Taiwan Semiconductor Manufacturing Company (TSMC), which currently manufacture most of the world's ARM-based processors.

The move follows Intel's decision to cancel plans to release new Atom chips - processors of its own design created for mobile devices - and last month's announcement that Japan's Softbank is buying ARM for £24bn.

"This provides Intel an opportunity to become a bigger player in the mobile market by leveraging its leading-edge manufacturing capabilities," commented Ian Fogg from the IHS Technology consultancy.

But he added that Intel now needed to sign up others beyond LG.

"Apple, for instance, relies on Samsung and TMSC to manufacture its chips. The fact it is willing to have more than one supplier could present an opportunity to Intel in the future."