Intel has signed a strategic memorandum of understanding to ship its low-cost little Atom chip over to Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest build-to-order foundry, for System-on-Chip (SoC) treatment in order to push the gismo into new unexplored, "post-recession" markets in embedded, netbooks, consumer electronics and mobile Internet devices (MIDs), the pair said first thing Monday morning.

They won't talk about what markets exactly or when all this is going to happen, but the move was described as enhancing Intel's current Atom roadmap, not re-routing it.

It took the companies two years to do the deal. Years while Intel looked at it every which way since, as it says, it's a "big step" for the company, which prides itself on its manufacturing skills and coincidently has plenty of capacity right now because of economy-induced lack of demand.

Intel was quite clear that the exercise is a lot broader than just producing a smartphone chip or an x86-compatible rival to ARM. It said there will be multiple SoC implementations, customized to precise client requirements.

Atom's cores will be ported to TSMC's technology platform including processes, IP, libraries and design flows.

The resulting parts will be sold to Intel's customers though TSMC's involvement might produce new leads, Intel acknowledged.

"This is about allowing both of our companies to go after customers we are currently not pursuing with full vigor," Anand Chandrasekher, general manager of Intel's Ultra Mobility Group, said.

Intel sales chief Sean Maloney was also quite clear about Intel retaining full control of the TSMC process and picking the product directions the SoCs will go.

TSMC already makes WiMAX chips for Intel as well as chips for Intel competitors Nvidia and SoCs for Qualcomm, TI and Broadcom.

Semiconductor sales fell about 29% globally in January according to the Semiconductor Industry Association (SIA). January of course is historically a weak month. There is also little in the way of inventory out there.