Following the announcement of Intel's (Nasdaq: INTC) first $40 billion year, CEO Paul Otellini disclosed that 22 nm development has been wrapped up. Manufacturing will be the company's main weapon to fight the upcoming processor war with ARM (Nasdaq: ARMH) architecture licensees.

Intel's next-generation process architecture, scheduled to debut late this year, has been removed out of the development stage and is now in yield learning deployment, Otellini told analysts. The company is currently building test chips and is ramping production yields.

"We have completed the design of our first microprocessor and have working microprocessors on that technology. At this point in time, our plan is to ramp production wafers of that technology in the second half of this year with products launched at some point to follow." As in the past, the new process will be introduced on mature processors first. "22 will be the mainstream microprocessors, because we want to use every early wafer we can for those products, but we will move as rapidly to 22 as possible for the non-PC part of the product line," Otellini said.

The executive stressed that the manufacturing process will remain Intel's strength, and it will be a key weapon against ARM-based processors. However, when asked about the new competition from ARM on Windows, Otellini was cautious in assessing the challenges when this new Windows OS is available.

"I view it as being not a lot of new news, and I can see positives and negatives for Intel in this announcement," he said. "Historically, Microsoft (Nasdaq: MSFT) has only supported ARM in their phone OS and in their consumer electronics OS. So they have had ARM support for some time." When competing with ARM systems, Otellini stated that Intel "will offer higher performance in comparable battery life configurations" and " by designing an Atom-based tablet, [OEMs] have the opportunity to run multiple OS's on it, which is I think a unique value proposition with Intel at this point."

The executive noted that the big advantage of this new operating system is that it will uniquely cater to a new set of devices: "The plus for Intel is that, as they unify their operating systems, we now have the ability for the first time, one to have design from scratch, touch enabled operating system for tablets that runs on Intel that we don't have today. Secondly, we have the ability to put our lowest power Intel processors running Windows 8 or next-generation Windows into phones, because of the same OS stack, and I look at that as an upside opportunity for us."


More from ConceivablyTech:

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.