In a story posted today on EETimes, Altera announced at the ARM Developers Conference that they have entered into a partnership with Intel to have their next generation 64-bit ARM chips produced at Intel’s fabs. According to the report, Altera will be using Intel's upcoming 14nm FinFET process technology to manufacture a Cortex-A53 quad-core SoC, which will be surrounded by FPGA logic.

The Intel/Altera partnership was first announced back in February 2013, and it's worth noting that FPGAs are not an area where Intel currently competes. Even though ARM logic will be on the new chips, this likely won't lead to direct competition with Intel's own chips. The bigger deal of course is that while Intel's 22nm process would give anyone willing to pay Intel’s price a leg up on the competition, 14nm is a full step ahead of the competition.

Intel has apparently inked deals with other companies as well. The Inquirer has this quote from an Intel spokesperson: “We have several design wins thus far and the announcement with Altera in February is an important step towards Intel's overall foundry strategy. Intel will continue to be selective on customers we will enable on our leading edge manufacturing process.”

The key there is the part about being “selective”, but I would guess it’s more a question of whether a company has the volume as well as the money to pay Intel, rather than whether or not Intel would be willing to work with them. There are many possibilities – NVIDIA GPUs on Intel silicon would surely be interesting, and given that AMD has gone fabless as well we could also see their future CPUs/GPUs fabbed by Intel. There are many other ARM companies as well (Qualcomm), not to mention Apple. But those are all more or less in direct competition with Intel's own processors, so unless we're talking about potential x86 or Quark licensees, it's tough to predict where this will lead.

If we take things back another step, the reality of the semiconductor business is that fabs are expensive to build and maintain. Then they need to be updated every couple of years to the latest technology, or at least new fabs need to be built to stay competitive. If you can’t run your fabs more or less at capacity, you start to fall behind on all fronts. If Intel can more than utilize all of their fabrication assets, it’s a different story, but that era appears to be coming to a close.

The reason for this is pretty simple. We’re seeing a major plateau in terms of the computing performance most people need on a regular basis these days. Give me an SSD and I am perfectly fine running most of my everyday tasks on an old Core 2 Duo or Core 2 Quad. The difference between Bloomfield, Sandy Bridge, Ivy Bridge, and Haswell processors is likewise shrinking each generation – my i7-965X that I’m typing this on continues to run very well, thank you very much! If people and businesses aren’t upgrading as frequently, then you need to find other ways to keep your fabs busy, and selling production to other companies is the low hanging fruit.

Regardless of the reasons behind the move, this potentially marks a new era in Intel fabrication history. It will be interesting to see what other chips end up being fabbed at Intel over the next year or two. Will we see real competitors and not just FPGA chips fabbed at Intel? Perhaps some day, but probably not in the short term.