Intel to work with Arm on chip manufacturing compatibility

Once the biggest name in chips known as central processing units (CPUs), Intel has long seen its technological manufacturing edge blunted by rivals such as Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world leader in making chips for customers such as Apple.

Intel's turnaround strategy hinges in part on opening up its factories to other chip companies, particularly those in mobile phones. It has said firms such as Qualcomm Inc are planning to use its factories for future chip designs.

"There is growing demand for computing power driven by the digitisation of everything, but until now customers have had limited options for designing around the most advanced mobile technology," said Pat Gelsinger, Intel's chief executive.

For its part, Arm, now owned by Japanese technology investment bank SoftBank Group and which plans to go public later this year, is a major supplier of intellectual property to many chip companies, especially in mobile phones. Arm has partnerships with major chip contract manufacturers in place to ensure that its designs will work well on their manufacturing processes.

The partnership announced yesterday (Wednesday) is aimed at putting Intel on an equal footing with TSMC and South Korea's Samsung Electronics - the two companies that currently manufacture most of the world's chips for mobile phones.

Last month, it was revealed that Softbank is considering new royalty payments for device manufacturers based on software especially compiled to run on Arm chips - an extension to the existing royalty payments collected for Arm supplying the silicon in the first place.

The global semiconductor industry is becoming increasingly competitive and tinged with geopolitical concerns, compounded by a severe shortage of the most popular and powerful modern chips.

In June last year, US commerce secretary Gina Raimondo warned that the global semiconductor crisis was likely to last deep into 2023.

In July, the US Senate voted to advance its long-awaited $52bn bill to boost the country’s domestic semiconductor industry, in part as a response to the global chip shortage, but also towards reducing US reliance on Chinese exports.

By January of this year, Dell - the world’s third-largest computer maker by shipments - announced that it was taking significant steps to end its use of Chinese-made components, starting with silicon chips and with the intention of entirely ending its use of semiconductors made in China by 2024.

Meanwhile, in the UK, the government was accused of putting the UK's own semiconductor industry at risk with the continuing delay in publishing its strategy to ensure the security of the supply chains for chips. MPs on the Business, Energy, and Industrial Strategy (BEIS) committee warned that the development of the UK’s burgeoning industry was at risk.