ARM has announced its Cortex A12 processor for 200 USD mid-range devices. ARM also took the opportunity to announce a new Mali GPU that it hopes will be paired with the Cortex A12 and its other graphics chip, the Mali T622. While the firm pitches the Cortex A12 at the lucrative midrange device market, the Mali T622 has full OpenCL 1.1 and OpenGL ES 3.0 support with the firm touting 50 percent energy efficiency improvements over previous generation Mali T600 series GPUs.

The A12 will come with up to four cores, and the first handsets and tablets with the processor will be out in late 2014 or early 2015, said James Bruce, lead mobile strategist at ARM.

ARM is seeing fast growth in mid-range mobile devices with prices above $200, with handset shipments expected to touch around 500 million by the end of 2015, Bruce said. With A12, ARM hopes to address that emerging market.

The A12 is a faster and more power-efficient replacement for Cortex-A9, which is now a five-year-old design, Bruce said. It is 40 percent more power efficient than A9, and up to 30 percent faster. That translates to better performance and longer battery life in tablets and smartphones.

"There's a group of people who want the leading edge features of smartphones, but don't have the budget to reach the $400 to $450 price," Bruce said.

ARM will have to contend with Intel, which is aggressively chasing the low-cost tablet market with its upcoming Atom chips code-named Bay Trail, which is based on the Silvermont core. Intel expects Android tablets running Bay Trail to be introduced later this year priced between $200 and $399.

The mid-range smartphones and tablets with A12 will be aided by the right system-level tools like graphics processors and software development kits, said Ian Drew, chief marketing officer with ARM, during a press conference at Computex in Taipei on Monday.

For one, the A12 will be optimized for mid-range devices with the Android OS, which is being used on tablets and smartphones, Drew said.

"We see this market being significantly larger than PCs," he added.

With the A12, ARM improved its single-threaded capabilities, said Patrick Moorhead, president and principal analyst at Moorhead Insights and Strategy, in an email.

"A synthesized A12 processor will need to contend with Intel's 22-nanometer Silvermont and 14-nm Airmont," Moorhead said, calling it "a tall order."

ARM licenses its processor designs to companies like Qualcomm, Nvidia, Apple and Samsung, who then make chips for mobile devices. ARM did not announce any licensees for Cortex-A12.

On performance, the A12 is a notch below Cortex-A15, which is for high-end smartphones, tablets and servers. Samsung's latest Exynos 5 chips in the Nexus 10 tablet and Galaxy S4 smartphone are based on the Cortex-A15 processor.

The A12 however borrows some features from the A15 chip. It is based on a similar processor core and has virtualization support, but the overall A12 size is smaller, Bruce said.