SAN JOSE, Calif. — Intel Corp.'s acquisition of Wind River Systems Inc. is another indicator of the sea change occurring inside the world's biggest semiconductor maker—along with the rise of Linux across all markets.

The x86 giant is expanding beyond big custom processors for its core desktop PC market and into a variety of system-on-chip (SoC) designs targeting a wide range of mobile, consumer and embedded markets. The industry-wide shift to multicore processors is also driving a need for a whole new set of parallel software tools.

On both fronts, Wind River can provide Intel some of the software heft it will need with both Linux and RTOS code.

The two companies have been expanding their collaboration for some time. A year ago, they rolled out a joint Linux/x86 offering in time for a big annual automotive conference, and since then they have continued to collaborate on Linux-on-x86 optimizations.

Both Intel and Wind River have been working on parallel software for multicore chips, with Intel providing seed money for major research efforts at the University of California at Berkeley, Stanford University and the University of Illinois. In addition, Wind River earlier announced a collaboration with Intel to optimize its Linux code for Intel CPUs.

Intel started a corporate-wide SoC initiative about two years ago to drive development. At its last analyst's meeting in May, Intel revealed it has 14 Atom-based SoCs now in development for markets spanning handheld devices to digital TVs where Linux-based software is key.

Broadpoint.Amtech analysts Doug Freedman wrote in a March research report that Intel is leveraging its x86 intellectual property and its cash holdings to gain access to cores it needs for its drive into embedded markets.

The chip maker aims "to act on opportunities that expand its IP portfolio in support of non-PC related revenue," Freedman said. "We continue to believe investors are underestimating the effort Intel is placing on non-PC revenue sources," he added.

Mobile devices may be one wrinkle in the new acquisition. The two companies are to some extent working on redundant efforts in mobile, a hugely important market for both of them.

Intel recently launched a major update of its Moblin software, mobile Linux code for which it has worked hard to create an active community of developers and users. Moblin is a major enabler for Intel's Atom, which is increasingly going head-to-head with rival ARM in the mobile market. That became starkly clear after Intel's announcement in March it is making Atom cores available from Taiwan Semiconductor Manufacturing Co. Ltd. for third party embedded designs.

Open source is clearly becoming the wave of the future in consumer, mobile and embedded markets. The latest survey from TechInsights of the embedded operating system shows use of commercials OSes are declining slightly while use of open source code is increasing.