The battle between Intel Corp. (Nasdaq: INTC) and ARM Ltd. took an unexpected twist today when Intel announced that it had licensed ARM. LG Electronics Inc. (London: LGLD; Korea: 6657.KS) will be one of Intel's first customers.
On the face of it, this is less about Intel's competition with ARM for chip designs than it is about Intel's competition with other major contract manufacturers, notably Samsung Corp. , Taiwan Semiconductor Manufacturing Co. (TSMC) (NYSE: TSM) and Global Foundries, to build ARM-based ICs.
These foundries are leading the world moving from the 14 nanometer node to 10 nm, and they're all working on the move to 7nm. Yesterday there was an unconfirmed report that Global Foundries is going to go from 14 nm to 7 nm, skipping the 10 nm node entirely.
Intel's foundry business has been lagging. As it builds more capacity at 10 nm, it has more capacity to spare. ARM remains popular in smartphones Apple Inc. (Nasdaq: AAPL), Huawei Technologies Co. Ltd. and Samsung are among those who use ARM ICs in their products), one of the higher-volume applications for chips.
As early as three years ago Intel had signaled it was open to making ARM-based circuitry -- based in part on widely circulated rumors that Intel was talking to Apple about making ARM chips for them -- but Intel had had no takers. Now it has one in LG Electronics, which Intel said will produce a mobile platform based on Intel Custom Foundry's 10 nm design platform.
The 10 nm design platform for foundry customers will now offer access to ARM Artisan physical IP, including POP IP, based on the most advanced ARM cores and Cortex series processors. Implementing circuitry at the next lower node almost automatically brings reductions in power consumption and an increase in performance.
Many expect the deal with LG paves the way for similar arrangements with other companies that use designs based on ARM, including Apple and Qualcomm Inc. (Nasdaq: QCOM), but that remains entirely speculative.
Licensing ARM suggests that Intel is finally throwing in the towel when it comes to the smartphone business, and might also signal it is giving up on the IoT market, according to Telecoms.com.
Intel is suggesting the opposite. In a blog post, Intel Vice President Zane Ball said that being able to build ARM-based devices will help Intel's customers and partners, though the intimation wasn't backed by many details.
Less clear is what this might mean in the data center market, where Intel has a near monopoly that rivals had hoped to chip away at using ARM-based systems. If Intel can also do ARM, it could conceivably play both sides of that game, dissipating the threat. (See Group Forms to Take On Intel in Data Centers, Cavium Debuts SoC for Data Center Servers and Mellanox Eases Into Network Processor Market.)
— Brian Santo, Senior Editor, Components, T&M, Light Reading