In fact Intel manufactures the host controller but the driver is from Microsoft. The Intel Chipset Software Installation Utility does not install updated USB drivers. You can confirm this information at:
As a matter of fact we do not provide chipset driver updates through Intel(R) Chipset Software Installation Utility. That is not a chipset driver, that is a misconception that is explained on this article:
What you can try to do at this point would be to update the firmware of the device you are having issues with and update the BIOS of your computer. Further than this check with your USB device manufacturer for further recommendations or know compatibility issues.
The USB device is not capable of being updated (and the manufacturer has no more idea than what could be causing the issue than I do). The issue appears to be driver-related and not a device fault however, so in essence I would need to contact Intel for support for the Atom drivers, and Microsoft about the ICH10R to pursue this any further? Thank you for the information and suggestions.