Qualcomm Leapfrogs Intel With 28-Nano Chips

Qualcomm (s qcom) said today that when it comes to making its next-generation chips smaller, it will skip a generation. As part of its effort to gain an edge over rival Intel (s intc), the wireless chip giant plans to start manufacturing 28-nanometer chips, blowing past the 32-nanometer technology most chipmakers are implementing as cutting edge today — including Intel, which touted such a move just yesterday. Qualcomm is currently making 45-nanometer chips.

At one time, the two ruled different roosts — Intel, the PC industry, and Qualcomm, mobile devices — but as Intel moves down market into phones with its Atom chips (it just showed off a smartphone containing its Moorestown processor) and Qualcomm pushes its ARM-based processors into smartbooks, the two are increasingly fighting one another for business (GigaOM Pro, subscription required).

So what does that have to do with smaller chips? Shrinking a chip makes it smaller, faster, cheaper to manufacture on a per-unit basis, and more energy efficient –all good things when it comes to mobile devices. If Qualcomm can successfully leap ahead of the rest of the industry, its chips will perform better and cost less, giving it a significant advantage.

Qualcomm is teaming up with Taiwan Semiconductor Manufacturing Corp. to move its chips down the process node, starting around the middle of this year.  Intel has traditionally exploited this advantage to either boost its profits or increase its margin share against its rival AMD (s amd). Giving Qualcomm that same ability could make Intel’s already difficult move down market into mobile harder and less profitable.