The chip times are a-changin': Intel agrees to build ARM chips

And not just any ARM chip -- Intel will use its 14nm technology to build the most advanced Altera 64-bit quad-core ARM chip ever

In what may be the most dramatic example of hardware "embrace and extend" to date, Altera announced at the ARM developer's conference yesterday that it had reached an agreement with Intel to manufacture Altera quad-core 64-bit ARM Cortex-A53 chips using Intel's latest 14nm technology. Forbes claimed to have an exclusive scoop on the announcement, although Mark LaPedus at Chip Design reported on the agreement with Intel back in February.

Forbes cast the story as one of Intel rushing to catch up in the mobile market. The true nature of the beast, however, is far more nuanced.

Under the terms of this agreement, Intel isn't going to design or sell an ARM chip. Rather, Intel has agreed to use its state-of-the-art 14nm foundries to build chips for Altera. The foundry business is highly competitive -- TSMC and United Microelectronics (UMC) in Taiwan and California-based GlobalFoundries are all full-time foundries. Samsung in South Korea has an enormous foundry division. Intel's tossing its hat into the ring to compete with those foundries and several smaller ones, using its brand-new 14nm fabs in Oregon, Arizona, and Ireland.

In other words, Intel's not competing against ARM -- at least, not with this contract -- it's competing against TSMC, UMC, GlobalFoundries, and Samsung.

Part of Intel's motivation may have more to do with excess plant capacity than a driving need to build Intel-stamped ARM competitors. Jason Mick at Daily Tech explained earlier this month that Intel had to delay its 14nm Broadwell chips to Q1 2014 because of problems shrinking the Haswell/Broadwell die from 22nm to 14nm. Reading between the lines, it looks like the delay left Intel with excess 14nm manufacturing capacity -- at least until next year. 

Don't be misled. Intel still wants to eat ARM's lunch, and its efforts to produce a souped-up version of Intel's Atom processor, called Quark, continue unabated. Quark, we're told, will be one-fifth the size of Atom and consume one-tenth as much power. While Intel will initially manufacture Quarks at its own fabs, at some point the system will be licensed out to third parties. Intel's stealing a page from ARM's playbook.

So yes, one day you could see an Intel-based Quark chip manufactured by, oh, TSMC. Just as you could see an Apple A7 chip or Qualcomm Snapdragon or Nvidia Tegra -- all ARM based -- manufactured by Intel.

The nature of the chip business is changing quickly. Let the competition begin.

This story, "The chip times are a-changin': Intel agrees to build ARM chips," was originally published at InfoWorld.com. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog. For the latest developments in business technology news, follow InfoWorld.com on Twitter.

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