By Jane Lanhee Lee and Stephen Nellis

Arm Ltd on Monday rolled out new chip technology for mobile devices and Taiwan smartphone chip maker MediaTek Inc said it will be using it for its next-generation product.

MediaTek, a longtime supplier of low- and mid-tier smart phone chips, has been pushing into the market to supply chips for premium smartphones, once dominated by rival Qualcomm Inc, which has been in a legal battle with Arm since last year over chip licensing agreements.

In Arm's blog announcing the new products, MediaTek said the new chips will help improve the performance of its next-generation smartphones.

Arm sells blueprints chip designers use to build their own hardware. It is launching Immortalis-G720, a chip for video image processing and AI applications, and the Cortex-X4, a processor that would be the brains of the mobile device at Taiwan's Computex conference.

Arm said both new chips have 15% better performance than their previous generations, and the Cortex-X4 uses 40% less power, key for smartphones that need to keep battery use time long.

Arm also said it has "taped out" the Cortex-X4 at Taiwan Semiconductor Manufacturing Co., which means it had a chip manufactured at the factory, an expensive process usually done by chip designers that sell the final chip.

Asked by Reuters during a briefing if the tape out meant Arm was making a chip to sell instead of its long-time business model of providing the blueprint to chip makers, Chris Bergey, the general manager of Arm's Client Line of Business, said this was a step it sometimes takes to help test out new manufacturing technology for customers.

"Arm is not in the business of selling chips. That's not what we do," he said.

Last month the Financial Times reported that Arm was developing its own chip to showcase the capabilities of its designs.

Arm said the Cortex-X4 was taped out on TSMC's N3E process and said it was an industry first.

(Reporting By Jane Lanhee Lee and Stephen Nellis; Editing by Mark Porter)