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I imagine that it is likely that sharing most hardware will lead to side channel vulnerabilities, and the per-core cache is not special. Smaller, cheaper SoCs could allow for sharing less of that hardware.

The problem of course being that CPUs that rival performance of a decently-specced x86 VM are going to be pricy, mooting the point.

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For high core count (server) CPUs all levels of cache are local to core(s). For example, in Intel's current plattform each core has a 1.x MB L3 slice attached to it. In AMD's Zen 2 design, each CCX (group of four cores) has 16 MiB of L3 attached to it.

Based on these architectural features Intel has had CAT, which essentially turns LLC slices into private caches for certain cores. That's intended for performance, but is now also relevant for security.

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