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NEW YORK (TheStreet) -- Altera, (ALTR) - Get Altair Engineering Inc. Report a Silicon Valley designer of custom computer chips. has tapped Intel (INTC) - Get Intel Corporation Report to manufacture its next-generation network server processors. What makes the announcement even more interesting is that these new processors will be based on technologies from Intel rival ARM (ARMH) . (ARMH)

The upcoming "Stratix 10" design will be a quad-core, 64-bit ARM Cortex-A53 central processing unit. It's the first of its kind ever.

Apple's (AAPL) - Get Apple Inc. Report recently announced 64-bit A7 chip now being used in the iPhone 5s and the brand new iPad Air is a dual-core design.

Altera shares were declining 0.41% to $33.72 in early morning trading Wednesday in New York.

Stratix 10 SoC (System on a Chip) will be built on Intel's latest "advanced 14nm Trigate transistor technology". Current Intel chips like the new Haswell design are made on a 22nm form. Intel has promised that it will be able to produce even smaller processors (just 10nm) by 2015.

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The new chip will not directly compete with other ARM-based designs from Qualcomm (QCOM) - Get QUALCOMM Incorporated Report or Samsung. Those manufacturer's processors are designed for smartphones and tablets. The new Stratix line targets computers which need to deal with super-bandwidth applications, deliver high performance levels and offer increased energy efficiency. Think in terms of networking and communications servers such as those controlling data centers or radar installations.

Intel will begin production of Stratix 10 processors in 2014. For further details there's a video available from Tuesday's announcement.

Altera, headquartered in Silicon Valley, created the world's first programmable logic device back in 1984.

Written by Gary Krakow in New York.

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