Intel and ARM are joining forces… And who would have thought, considering that they are top rivals in some computing fields, while others are trying to eat the toast of the former in segments such as personal computers and data centers. The question for Intel is clear: if you cannot compete with your enemy, join him.

Intel Foundry Services (IFS) and ARM have announced a multi-generational agreement that will allow ARM licensees to manufacture their products (basically Single Chip Systems, or SOCs) in Intel factories using next-generation production nodes known as Intel 18A. will advance production processes by up to 1.8 nm.

The collaboration will start with mobile SoC designs, meaning primarily smartphone chips, but also leaves the door open for a wider range of applications, including automotive, Internet of Things (IoT), data centers, aerospace and government, likely in the defense industries. Others like PC are not mentioned where Intel (still) dominates with their x86.

Intel IDM 2.0

It was announced in the spring of 2021 and is one of the biggest changes in business strategy in the history of the chip giant. Basically, it assumes the company’s entry into the foundry business, or what is the same thing: custom manufacturing of semiconductors for third parties.

The bet is monumental, and Intel will initially invest $20,000 million in two new manufacturing plants to be located in Arizona. Others have also been announced in Europe. The strategy also has some geopolitics, taking into account that most of the semiconductor manufacturing plants are located in Asia.

new model Intel device manufacturing for chip supply and manufacturing is considering three different parts to keep Intel at the forefront of the semiconductor business.

• internal production. The key to supplying its own processors and limiting the current problems that led it (for the first time) to outsource production to external suppliers.
• external factories. The use of foundries such as TSMC, Samsung and GlobalFoundries for certain products that Intel calls “core computing offerings” for consumers and businesses.
• Intel Foundry Services. Intel will become a foundry that will open up to making chips for third-party manufacturers.

This third branch of strategy is the newest and most interesting. IFS will operate as an independent business unit, producing chips on behalf of third parties on a variety of architectures, the x86 itself, ARM, for which this important deal was announced, and in the future a third, promising RISC-V.

Why Intel and ARM together? ARM is unstoppable

As a temporary point of interest, the announcement of this deal comes a few days after the release of a report by analyst firm Counterpoint, which asserts that ARM-based portable PCs will grow in popularity and market share in 2027 it will almost double from the current 14% to 25%..

Most of the ARM-based devices will come from Apple and its successful silicon project, which exactly replaced Intel. But it’s only a matter of time before more of the existing PC OEM/ODMs, as well as the smartphone manufacturers who absolutely dominate the mobility segment, will follow in Apple’s footsteps, bet on ARM and push this architecture forward. A lot will depend on how Microsoft resolves the current issues with Windows on ARM.

The what. It is clear that Intel sees its privileged position threatened and not only from ARM. AMD has become a big contender in PC CPUs, and NVIDIA is doing the same in servers with its CPGPUs, which are increasingly being used in artificial intelligence, deep learning, and high-performance computing applications.

Changes in the industry towards other types of architectures, such as ARM, require a response from Intel. In this case, the saying fits perfectly “If you can’t beat ’em, join ’em”.