Intel Is About to Start Making ARM Chips

As the old adage goes, if you can’t beat them, join them! Well, that’s exactly what Intel INTC -0.01% finally decided to do relative to its lagging mobile business.

At the ARM developers’ conference today, Intel partner Altera ALTR -1.12% announced that the world’s largest semiconductor company will fabricate its ARM’s 64-bit chips starting next year. An announcement that sent shockwaves throughout the technology industry as Intel is desperately trying to break ARM’s supremacy in the mobile market.

“It’s huge. Imagine ARM’s most powerful and technologically advanced 64-bits processor built on Intel’s leading-edge fabs. A duo that will be hard to beat,” explains Nathan Brookwood, principal analyst at Insight 64.

Intel opens kimono to arch-rival

But this is just the beginning of a much larger endeavor for the chip giant as Intel is even willing to compete with semiconductor foundry leader TSMC for the business of its fiercest rivals, like Nvidia NVDA -0.13% or Qualcomm QCOM +0.03%.

“Intel will build Apple's AAPL +1.61% A7, Qualcomm’s Snapdragon or the Nvidia Tegra for the right price. Now, the question is, are they ready to pay that premium and feed their direct competitor, except for Apple. But that would actually make business sense for everyone,” adds Brookwood.

With Intel ready to open up its leading-edge factories to whomever is willing to pay a premium, chip prices could actually come down, with the other foundries (TSMC, UMC, GlobalFoundries, Samsung, IBM or SMIC) feeling the pressure to compete.

But will Apple ditch Samsung for Intel? Time will tell…