Intel has announced a new agreement to make it easier for chip designers to produce Arm-based SoCs using Intel's 18A manufacturing technology. However, this does not mean that your next gaming PC will be Arm-powered.

The deal with Arm (open in new tab) is not actually an agreement to manufacture anything right away. In fact, it is not an agreement between Intel and Arm to manufacture anything, be it a SoC or a CPU.

Instead, the goal is to optimize Arm's chip design and IP for Intel's upcoming 18A node (opens in new tab), and conversely to make it easier for third-party licensees who use Arm's IP to ask Intel to manufacture chips.

Intel has stated that the support it will provide to these end customers will go beyond traditional wafer fabrication and include "packaging, software, and chiplets." It is a sort of one-stop store for turning new SoC ideas into physically usable products.

Furthermore, the agreement says nothing new about Intel's commitment to x86 PC processors. CEO Pat Gelsinger's IDM 2.0 strategy, launched several years ago, explicitly placed foundry services, or manufacturing chips for customers and having customers design them, at the center of Intel's new era.

Intel has always manufactured chips for its customers. For the most part, however, the company's fabs have specialized in manufacturing its own designs; under the IDM 2.0 strategy, Intel will open its fabs to any paying customer in a bid to become the world's leading foundry, like TSMC.

The initial agreement with Arm includes chip IP for SoCs like those used in smartphones; it is not clear how much overlap there will be with Arm chips used in PCs, laptops like Lenovo's Thinkpad X13, and Apple's M1 and M2 computers. The chips used in Arm-based PCs such as Lenovo's Thinkpad X13 and Apple's M1 and M2 computers are all SoCs, not pure CPUs.

According to a recent study, Arm chips' share of the PC market is expected to double from 12.8% in 2022 to 25.3% in 2027 (opens in new tab). At the very least, the new deal may help Intel cash in on its long-term shift from traditional x86 PC processors to Arm chips.

It has long been predicted that Arm would be absorbed into PCs. However, most of the recent market share gains by Arm have been typified by Apple's move from Intel x86 chips to Arm; Windows-based PCs with Arm chips remain very niche. Also, gaming PCs running on Arm have yet to appear.

Despite these caveats, perhaps wiser investors are saying that Arm will eventually dominate the PC. If that happens, this Intel/Arm deal could be an important stepping stone in hindsight.