Intel Foundry Services (IFS) has signed a ‘multigeneration agreement’ to allow semiconductor design company Arm to build chips in Intel’s factories.

The tie-up will enable chip designers to build low-power compute system-on-chips (SoCs) on the Intel 18A process.

Initially, the alliance will focus only on developing chips for mobile phones.

However; it can expand into other areas such as automotive, the Internet of Things (IoT), data centres, aerospace and government use cases.

Intel’s announcement comes as it faces tough competition from rivals, such as Taiwan Semiconductor Manufacturing Corporation (TSMC).

In response, the chip manufacturer is letting other semiconductor businesses use its plants, especially those that make chips for mobile phones.

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Intel CEO Pat Gelsinger said: “There is growing demand for computing power driven by the digitisation of everything, but until now fabless customers have had limited options for designing around the most advanced mobile technology.

“Intel’s collaboration with Arm will expand the market opportunity for IFS and open up new options and approaches for any fabless company that wants to access best-in-class CPU IP and the power of an open system foundry with leading-edge process technology.”

According to Reuters’ report, Intel has said that businesses such as Qualcomm intend to employ its factory for future chip developments.

To bolster its manufacturing capacity, Intel is investing in its global manufacturing capacity, including sizable expansions in the US and the EU as part of the IDM 2.0 strategy.

For Foundry clients working on mobile SoC designs using CPU cores based on Arm architecture, this collaboration is expected to enable a more balanced global supply chain.

Arm CEO Rene Haas said: “Arm’s collaboration with Intel enables IFS as a critical foundry partner for our customers as we deliver the next generation of world-changing products built on Arm.”