Under the pact, Portland, Ore.-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.

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