The chip designs will feature in a new range of Windows-based products, including tablets and mobile phones, which are likely to hit the markets in two or three years.
The deal will allow Microsoft to push into the high-end tablet market, which includes products such as Apple’s iPad.
The software was unveiled at the Consumer Electronics Show (CES) in Las Vegas in the US, the Daily Mail reported.
With the announcement, Microsoft confirmed it is committed to supporting the system-on-a-chip (SOC) architecture of integrating a computer’s components onto a single circuit.
Steven Sinofsky, president of the Windows division at Microsoft, said: “We’re showing the flexibility and resiliency of Windows through the power of software and a commitment to world-class engineering.”
Microsoft also said other Windows-based products would continue to use chip designs from Intel.
Cambridge-based ARM, which is a leading designer of chips for smartphones and tablets, saw shares rally to a 10-year-high after Microsoft’s announcement.
ARM chips consume less power than traditional PC microprocessors, which is essential for battery-powered devices like tablets.
