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My Profile Top News Reuters top ten news stories delivered to your inbox each day. Subscribe You are here: Home > News > Technology > Article Home Business & Finance News U.S. Politics International Technology Internet Entertainment Sports Lifestyle Oddly Enough Environment Health Science Special Coverage Video Pictures Your View The Great Debate Blogs Weather Reader Feedback Do More With Reuters RSS Widgets Mobile Podcasts Newsletters Your View Make Reuters My Homepage Partner Services CareerBuilder Affiliate Network Professional Products Support (Customer Zone) Reuters Media Financial Products About Thomson Reuters Intel, TSMC join forces on new Atom markets Mon Mar 2, 2009 3:16pm EST Email | Print | Share | Reprints | Single Page [-] Text [+] By Janet Kornblum SAN FRANCISCO (Reuters) - Intel Corp and TSMC have agreed to team up to develop and make the low-cost Atom chip for use in a swathe of consumer electronics devices, expanding its use beyond netbooks as the chip makers target new markets in a deepening recession. The move represents a major departure for Intel, which has always manufactured its own microprocessors but is now forced to bring in partners, analysts said. The world's largest chip maker and the world's biggest producer of made-to-order chips said on Monday Intel plans to combine the circuitry of its Atom, which is prevalent in ultra-small laptops, with the circuitry of other chips, creating a new architecture. But Intel said it will not transfer its highly prized manufacturing process technology to TSMC. And neither firm would divulge targets, specifications or timeframes. Intel will, however, allow TSMC to manufacture its Atom chips used in devices such as cell phones, set-top boxes and cameras. "Manufacturing an Intel core other than at Intel is something that has not happened before," said Intel spokesman Chuck Mulloy. "For the first time, Intel is transferring the design technology to a third party." But the move also could open new markets for Intel much more quickly than the chip giant could do on its own, said Hans Mosesmann, an analyst with Raymond James. "By coming to TSMC, it's more humbling (for) Intel," Mosesmann said. Intel would have preferred to do it on its own but it didn't have the in-house technology to get into the markets quickly, he said. "It's more of an acknowledgment that the way we hoped to do this is not going to work out." But he added: "It's the right choice. Intel has to bow to the reality that they're not good at everything." The deal might also offer a lift for TSMC, which gets to make the new chips that emerge from the partnership but is now struggling with crumbling global spending on devices. "We're not changing our long-term strategy, our roadmap for the Atom," Anand Chandrasekher, general manager of Intel's ultra mobility group, told analysts on a conference call. "This is an additional market" expansion." The firm wanted "to go after new segments." Intel announced in January it would shut plants in Malaysia and the Philippines and its one surviving factory in Silicon Valley, cutting as many as 6,000 jobs. At the same time, the firm plans to spend $7 billion over two years to build next-generation, 32-nanometer chip manufacturing capacity. Atom is the Intel chip used on low-cost, low-power laptops called netbooks, one of the fastest-growing electronics markets amid a deepening global recession. Continued... View article on single page Share: Del.icio.us Digg Mixx Yahoo! Facebook LinkedIn Next Article: iPhones and PCs take fitness to heart Also On Reuters Blog: Violence south of the border -- is worst to come? Reuters Industry Summit: Travel & Leisure iPhones and computers take fitness to heart More Technology News iPhones and PCs take fitness to heart Mobile phone growth helps poorer states: U.N. 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