Intel is combining its low-powered Atom processor with programmable chips made by Altera in a bid to get more of its silicon into medical equipment and other embedded applications.
Intel, whose processors are the brains in 80 percent of the world's PCs, is rushing to stake out territory in faster-growing markets as more and more consumer gadgets and industrial devices become computerised and interconnected.
Combining a version of its Atom processor, ubiquitous in netbooks, with Altera's field-programmable integrated circuits allows Intel to offer chips that clients can customise to suit their own requirements.
With the market for traditional PCs seen as maturing, Intel expects demand for embedded chips to grow 25 percent a year over the next four or five years.
In September, Intel launched processors aimed at in-car computers and web-television and last week, the Santa Clara, Calif-based company said it bought Canadian start-up CognoVision, which makes digital signs, another major destination for embedded silicon.
Since they can be manufactured in larger quantities, field-programmable chips useful for several purposes tend to be cheaper than chips designed for very narrow requirements.
Intel said the new chips would be in full production in the second quarter of next year.
Intel is also rushing to build market share in smartphones and tablets, a market dominated by ARM, which licenses designs for energy-efficient chips to Nvidia, Marvell Technology and Qualcomm.
Intel says a new chip aimed at tablets, code-named Oak Trail and due out in early 2011, will have improved power consumption and be more competitive.
(Reporting by Noel Randewich, editing by Gerald E. McCormick)