As reported, Intel, based here, will port unspecified Atom processor cores to Taiwan Semiconductor Manufacturing Co. Ltd.'s technology platform, including processes, IP, libraries and design flows under the terms of an agreement between the two companies announced Monday (March 2).

The deal goes beyond a simple foundry or intellectual-property (IP) deal, however. Besides attempting to lower the manufacturing cost structure for the Atom processor, Intel is attempting to reach more customers for the processor in four key markets: consumer, embedded, handheld and netbooks.

In addition to Intel, customers can now gain access to Atom and other IP at TSMC (Hsinchu, Taiwan) as a result of the deal with the foundry giant. With the TSMC deal, Intel also hopes to jumpstart the slumping electronics market with new IC design activity.

But it could also intensify a growing rivalry between the company and IP processor king ARM Holdings, said Doug Freedman, an analyst with Broadpoint.AmTech. ''This is aimed to get into ARM's markets for embedded,'' Freedman said.

ARM has a different model than Intel, which sells standard x86 processors. The U.K.-based firm licenses its IP to companies, but still, the rivalry is heating up. Recently, for example, Intel took the wraps off a new NetTV processor and an X86 set-top box processor. Intel is also vying with ARM for a dominate share of the Mobile Internet Device (MID) market with its new Atom CPU.

Not only does the new deal put Intel on a further collision course with ARM, but it also pits the Intel-TSMC duo against IBM Corp.'s ''fab club'' in the embedded space. In recent times, ARM has become cozy with IBM's technology alliance and announced a 32-nm processor core based on the process technology from Big Blue.

Over time, Intel hopes to shake up the entire embedded space, which is occupied by a plethora of chip vendors and architectures. Intel has been selling into the embedded market with x86-based processors for years, but it wants to expand those efforts with Atom.

To boost its efforts, Intel on Monday also rolled out four versions of its Atom mobile PC processor and two new companion I/O chips tailored for different embedded systems markets.

So far, Atom has done relatively well selling into ultra thin and light subnotebooks that Intel has dubbed netbooks. ''Intel has got no choice'' but to expand its efforts with Atom, Freedman said. ''The market (for PCs) is growing at the low end.''

This is both good and bad news for the chip giant. The Information Network (New Tripoli, Pa.), a research firm, said many consumers who purchased netbooks would likely have bought PC notebooks had the new product category not emerged. Assuming a price difference of at least $200 each between Atom processors and Intel's more expensive Penryn devices for notebooks, the firm estimates that Intel lost $1.14 billion in revenue in 2008 by making cheaper processors and stands to lose another $2.16 billion in 2009.