Intel and Taiwanese semiconductor foundry TSMC have announced a strategic partnership today to collaborate on Atom chip production. Under the deal, Intel would port its Atom processor CPU cores to the TSMC technology platform enabling them to expand their market beyond netbooks and into smart phones, set-top boxes and other small electronics.

The deal is specifically intended for future system-on-chip versions of Atom, like Pineview, and would let TSMC build custom Atom-based products for other companies. That way Intel will find it easier to sell to electronics manufacturers that already buy from TSMC and have a lot of their products’ technologies tied up in the way TSMC makes its chips. This is a major shift in tactics for Intel, which prides itself on doing chip manufacturing in-house, but could be an important one for the company to better compete with ARM and others in the mobile space.