Chip maker Intel has entered an unlikely partnership with British semiconductor firm ARM in an effort to boost opportunities for its foundry business.

The licensing agreement, which was confirmed at the Intel Development Forum in San Francisco, means that from 2017 Intel’s Custom Foundry will manufacture ARM chips – used by smartphone giants such as Apple, Qualcomm and Samsung.

On the announcement of its latest earnings report, Intel was clear to highlight a shift in focus, away from the traditional PC market, to emerging areas such as the Internet of Things and mobile – a sector currently dominated by one-time arch rival ARM. It seems that Intel has now decided to surrender to the latter’s prominence in the field.

The new deal with ARM will see Intel advance the production of ARM’s system-on-a-chip offering (SoC) across its 10-nanometre process. In particular, ARM’s Artisan Physical IP solutions for the design and implementation of SoCs will be made available to Intel, as well as its intellectual property.

‘ARM is a leader in processor and physical design, and Intel Custom Foundry is a leading integrated device manufacturer. This combination is a win-win for customers,’ commented ARM’s Will Abbey.

Custom Foundry co-general manager Zane Ball added in an official blog post that foundry customers will now have the opportunity ‘to achieve best-in-class PPA (power, performance, area) for power-efficient, high-performance implementations of their designs for mobile, IoT and other consumer applications.’

Ball spoke of Intel’s growing EDA and IP ecosystem, noting partners such as ANSYS, Cadence, Mentor Graphics and Synopsys. The company is already making chips for customers including Netronome, and LG Electronics, which is already due to ‘produce a world-class mobile platform based on Intel Custom Foundry’s 10 nm design platform’.

ARM was purchased by Japanese tech group SoftBank for $32 billion (approx. £25 billion) in July, in a bid to become the leader in the future of IoT.