Taiwan Semiconductor, the world's largest contract manufacturer of chips, makes products for Qualcomm Inc., Nvidia Corp. and Advanced Micro Devices Inc. Taiwan Semiconductor and Intel have some of the most advanced chip plants in the industry.

Chips from the partnership may go into smart phones, small notebook computers and consumer-electronics devices, executives from the two companies said yesterday at an event at Intel's headquarters in Santa Clara, California.

Atom, a scaled-down version of Intel's personal-computer processor, is central to Chief Executive Officer Paul Otellini's plan to reach new markets. Intel, which has 80 percent of the PC processor market, designed Atom to use less power than its other chips, making it better for home electronics and industrial uses. By working with Taiwan Semiconductor, Intel gets access to other technology that will be combined with Atom, letting the company create a so-called system on a chip. That allows Intel to get into new markets much faster than if it built the chips itself, said Sean Maloney, the company's head of sales. Under the terms of the agreement, Intel will determine which products are sold, as well as what devices the chips get used in. The company won't transfer manufacturing technology to its partner, Maloney said.

Intel Corp., the world's largest chipmaker, will use Taiwan Semiconductor Manufacturing Co. to make some versions of its Atom chip, the first time it has ever used a contractor to build one of its processors.

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