Intel’s Plessey deal offers access to ARM and sensor chips

 Intel Tuesday signed a deal with Plessey Semiconductor that gets it into next big chip opportunity — sensors. It also gets Intel back into the ARM (s armh) architecture, however indirectly, as Plessey was the first licensee of the ARM-processor all the way back in 1992. Intel signed a licensing deal with the European chip firm Tuesday and took an option to buy a financial stake in the business.

The British chipmaker, which was formed in 1957, makes a huge variety of chips including radios for the cell phone market and motion-sensing chips. It has a storied history of working with a number of large players including Apple (s aapl). Apple used Plessey’s wireless LAN chipset to develop a Wi-Fi system in 1994.

Most of what one needs to know about the deal and Intel’s possible ambition can be viewed in the video below that detail the many capabilities of Plessey’s EPIC line of semiconductors. Plessey proposed they can do everything from EKG monitoring to provide motion detection for use inside toys.

Under the terms of the deal Intel has taken some warrants in Plessey. Warrants are an option to buy a financial security at a set price later on down the road. The warrant agreement is for an unspecified number of shares in Plessey’s holding company. On its side, Plessey will be licensed to manufacture, sell and support a select number of products in Intel’s digital tuner portfolio. The partnership aspects of the deal, as opposed to an outright acquisition, seem similar to a deal that Intel signed in December with French Near Field Communications provider Inside Secure. I’ve reached out to Intel to understand if these partnerships represent a shift in strategy for it and its Intel Capital arm, but it’s pretty clear why Intel is gearing up with Plessey.

The spread of broadband and more and more people carrying around computers on their persons in the form of smartphones and fitness trackers make sensors a huge opportunity. Intel may not win out on the application processor inside phones, but it also owns a radio business it bought in 2011 and if it can make headway with sensors it can perhaps get a piece of some of the other silicon inside these devices. Plus, the way the Plessey sensors work is fairly novel and can be broadly applied outside of the EKG monitoring. For example, Plessey says future generations could be used to detect motion and used in gameplay. So as the healthcare industry follows entertainment with the use of wireless technology, having medical sensing capabilities will help Intel today, even as Plessey’s sensor tech could help Intel tomorrow for new interfaces.