Taken from this blog : Wolfe's Den: Intel Inches Into Its Next Big Market
SoC is a fancy term in the semiconductor world, used to refer to silicon that's customizable in a cost-effective manner. Specifically, a bunch of off-the-shelf blocks of intellectual property (IP) are available and can be plopped onto a silicon die, according to an individual customer's demands. IP blocks refer to functional sections like a CPU, input/output handler, digital signal processor, network interface, etc.
It appears to me that Intel has slightly misappropriated the SoC term in applying it to what they're calling the "Intel SoC processor for cars, Internet phones and smart grid devices" [pdf press release].
These SoC Atoms are really regular, off-the-shelf CPUs. If they were true SoCs, they'd be different for each customer. However, they'd also be prohibitively expensive for most buyers. What Intel has done is to select the most popular functional blocks to create a "custom" part usable by nearly everyone. This is analogous to what Detroit used to do when they stuck a "custom" badge on a mass-produced variant of a popular sedan. The biggie in the Atom is an interconnect intended for easy pairing with a variety of input/output devices, the better to be useful in embedded apps.
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