The company has signed a memorandum of understanding on a deal which will see TSMC join Intel in the design and development of new chips for Intel's Atom and system-on-chip (SOC) lines.
Intel hopes that the move will allow it to further broaden the market for Atom processors. The company has pegged the chip for products ranging from smartphones to embedded industrial computer systems.
"We believe this effort will make it easier for customers with significant design expertise to take advantage of benefits of the Intel architecture in a manner that allows them to customise the implementation precisely to their needs," said Intel president and chief executive Paul Otellini.
"The combination of the compelling benefits of our Atom processor with the experience and technology of TSMC is another step in our long-term strategic relationship."
Shortly after confirming the deal with TSMC, Intel also unveiled plans for four new Atom processors. The new chips will target in-car systems, industrial and ecological systems and mobile phone handsets.
The new 'Atom Z5xx' chips are slated to be available by the second quarter of this year.
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