Compared to Intel
Owning its own foundries benefits Intel in another way too -- there's no need for licensing debates or foundry payment agreements. ARM has said that it can take months to hammer out a licensing agreement with a company, particularly if the agreement is a complex multi-year arrangement. AMD's troubles with GlobalFoundries since 2011 have illustrated how yield problems and uncompetitive parts can hamper both sides of an agreement; Sunnyvale paid GF some $750M last year for the right to build Kabini and Temash at TSMC.
ARM would argue that Intel's manufacturing advantage, meanwhile, is an advantage for Intel as opposed to Intel and its customers. Again, the company has a point. Dell, HP, and the other PC OEMs are partly to blame for the miserable shape of their own margins (as low as 2%), but there's no denying that Intel's price structures and market dominance have played a part. It's a bitter pill for the PC manufacturers to swallow, particularly when Intel's margins have been above 60%, as they were before the bottom dropped out of the PC market.
It's true that Intel's entry into these markets has driven margins sharply downward at virtually every level -- except for Intel itself. Whether you view that as a positive depends on if you're one of Intel's competitors.
Intel would argue that its manufacturing expertise has been instrumental in driving computer prices lower and enabling new form factors in desktop and mobile. Its ultimate responsibility is to consumers not to competitors. While it offers less flexibility and fewer architectures in an absolute sense, Santa Clara claims that superior technology allow it to target a wider range of usage scenarios with a much smaller number of chip designs.
Why doesn't Intel have a microprocessor even smaller than Atom? (Quark? Gluon?) Because it doesn't need to. Because it can address the markets that ARM would serve with a different processor design with a single chip, thanks to superior manufacturing and process technology.