Under the pact, Lee, Mass.-based Wave Systems will supply software to enable a chip that handles security functions, called the Trusted Platform Module (TPM). The chip will be included on an Intel motherboard coming out in the fourth quarter, an Intel spokeswoman said.
With the TPM, users will be able to encrypt or decrypt documents as well as ensure that they get stored in secure areas on a PC's hard drive. The TPM specification was designed by the Trusted Computing Group, an industry consortium trying to establish standards for security. Members include Advanced Micro Devices, Hewlett-Packard, IBM, Intel and Microsoft.
News of the deal caused Wave's stock to jump 168 percent, to $2.25.
Worms, hacks and credit card fraud have made the security segment one of the hottest in the information technology industry and prompted large and small companies to develop new products that can prevent unlawful intrusion.
Still, getting customers to adopt security technology has often proved difficult. Security analysts say that many virus outbreaks and security problems are caused by the failure of computer owners to apply patches soon enough.
"People are making security a bigger topic of conversation than it was, but in the end I think it's been mostly talk, and not a whole lot of action," said Marc Maiffret, chief hacking officer for network protection company eEye Digital Security, earlier this week. A number of security experts are in Las Vegas this week for Black Hat Briefings and DefCon, two major security conferences.
Security technology also often raises consumers' hackles. Several critics have claimed that Microsoft's Next Generation Secure Computing Platform will indirectly allow film and music companies to prevent any copying of their work.
In the late 1990s, Intel caused a furor when it said it would incorporate a "serial number" in its processors. Privacy advocates claimed the numbers could be used to track Internet surfing, a claim largely debunked by many security experts. In reality, the serial number would have performed similar functions to the TPM had it survived the controversy.
Wave's software will be included in an Intel motherboard that will likely be adopted by so-called white box PC manufacturers, said the spokeswoman. White box manufacturers are typically dealers who custom-build PCs for regional markets. Small and medium-sized businesses are the primary customers for these outlets.
"Wave has been working closely with Intel on the development of application and service solutions," said Brian Berger, senior vice president of global business development at Wave, in a prepared statement. "Both companies believe that in order to accelerate adoption in the marketplace, it is critical to identify and offer an attractive introductory set of services and high value applications."