Confirming plans it has been telegraphing for more than a year, chipmaker Advanced Micro Devices said that it will begin building its first chips based on designs from the British firm ARM Holdings.

The move represents for AMD a break with its past of building chips for PCs, servers and other computing gear that are compatible and thus compete with those from rival Intel. Those chips are known in the semiconductor industry parlance as x86.

Chips based on ARM’s designs dominate the world of mobile phones and tablet, and licenses are held by companies as varied as Apple, Broadcom, Qualcomm, Samsung and Nvidia. In recent years they have started to make inroads into personal computers, and several companies have sought to build ARM-based chips into higher-end machines like Web servers.

AMD’s plan for what it is calling Project SkyBridge essentially calls for creating a “pin-compatible” architecture, which in English means that manufacturers of servers and other computing gear will be able to build machines that can use either flavor of chip. Either type of chip will literally fit in the same slot on the motherboard, streamlining the manufacturing process and lowering the overall cost of development, says Pat Moorhead, an analyst with the Austin-based research firm Moor Insights and Strategy. AMD’s first products will appear in 2015.

“It will save these companies a lot of effort as they design these systems. They can take more time to figure out if they want to use an x86 or ARM chip,” he said. “It removes a key barrier to investment in using AMD. You can build around one platform yet reach multiple markets.”

The new chips will also give AMD its first chips to support Google’s Android operating system for tablets and smartphones. Chips that could go into servers could follow in 2016, Moorhead says.

While for AMD the move amounts to a diversification of its product lines that should open up potential for new markets, for its longtime rival Intel it widens the competitive front of companies offering ARM-based chips.

While Intel heavily dominates both the personal computer and server markets with its Core and Xeon chips, it has struggled to win a meaningful portion of the market for smartphones and tablets using its Atom processors. All three are adaptations of the x86 architecture.

ARM chips are based on basic designs licensed to third parties by the British firm ARM Holdings. Those companies then work around those basic designs by adding their own specialized bits to the chip.

Shares of ARM fell 30 cents to $44.65. AMD shares also fell three cents to $4.09. Intel fell nearly one percent to $26.17.



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