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Intel joins Apple, Alphabet and Samsung as an Arm investor

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Intel's Investment in Arm

Intel has hopped onto the Arm investment bandwagon, rubbing shoulders with tech giants like Apple, Alphabet, and Samsung, according to a report by Tom’s Hardware. This move by Intel coincides with Softbank’s preparations to take Arm public, with plans to offer a whopping 95.5 million shares at a price range of $47 to $51 each. The company’s valuation stands at an impressive $52 billion, surpassing the near-deal where Arm was almost sold to Nvidia for $40 billion, an agreement that crumbled in 2022 due to regulatory hurdles, including the Federal Trade Commission’s lawsuit seeking to block the acquisition.

Now, you might wonder why Intel, a company known for its x86 chips, would cozy up to a competitor like Arm. Well, the answer lies in efficiency. Arm’s chip designs have proven to be more power-efficient compared to Intel’s x86 chips. Stuart Pann, Senior Vice President and General Manager of Intel Foundry Services, confirmed this investment during the Goldman Sachs Communacopia & Technology Conference Call. He emphasized that around 80 percent of TSMC’s wafers are embedded with ARM processors. By embracing Arm at this level, investing in it, and forming partnerships, Intel signals its serious intent to play in this arena because in the chip manufacturing game, if you’re not working with Arm, you simply can’t be a major player.

As an “anchor investor,” Intel can look forward to better access to Arm’s future chip design intellectual property (IP), which it can then put into production through its expanding contract factory initiatives.

But that’s not all. Intel has its eyes set on other low-power chipsets, including RISC-V. Pann noted that this is where the “volumes” lie in the brave new world of mobile-first computing. This move reflects Intel’s acknowledgment that its previous efforts in this space haven’t quite hit the mark compared to its nimbler rival.

Intel’s decision to jump into the Arm investment fray comes at a time when the semiconductor manufacturing industry is experiencing tremendous growth, backed by government incentives. Earlier this year, the Biden administration opened the floodgates for companies to tap into a $39 billion fund earmarked for semiconductor manufacturing. In a related development, Apple recently extended its licensing agreement with Arm, stretching it all the way to 2040. Apple has a long history with Arm, being one of its original supporters, and now relies on Arm’s technology as the backbone of its entire product lineup.

So, as the tech industry continues to evolve and reshape itself, it seems that even giants like Intel are willing to adapt and collaborate with former competitors to stay ahead in the game. The future of chip technology is indeed an exciting, ever-changing landscape.

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