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Microcontroller has a CPU, in addition with a fixed amount of RAM, ROM and other peripherals all embedded on a single chip.

Microprocessor is an IC which has only the CPU inside them. They don’t have RAM, ROM, and other peripheral on the chip.

These are the definitions for Microcontroller and Microprocessor I found form googling. Is MPC8260 microprocessor or microcontroller? When I saw the architecture of MPC8260, it has Timers, cache memory and other peripherals on-chip. But on data sheet the title is MPC8260 Microprocessor. I am getting confused of this. MPC8260 is used for specific purpose. In that point of view, we should call it a microcontroller. But why are they calling it as microprocessor?

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The primary difference between a microprocessor and a microcontroller is that an MCU has sufficient built-in memory and I/O to work stand-alone, without requiring external interface and support chips (thus making it a 'controller' rather than a 'processor'). An MCU can trade bus signals for I/O pins, whereas a CPU needs the full bus to access external memory and I/O.

Of course some devices blur the line. MCUs may be 'ROMless', and CPUs can have a limited amount of built-in I/O. For example the HD64180 is a Z80 CPU combined with several support chips (MMU, DMA, Timer, UARTs) and optional internal ROM and RAM. However it is still described as a CPU because the full Z80 bus is available externally (so you could ignore the peripherals and use it as a bare CPU if you wanted).

Then there are chips which integrate a CPU or MCU with other specialized hardware. The MPC8260 is one of these. It is neither a microprocessor nor a microcontroller, but it does have both a microprocessor and a microcontroller embedded in it.

MPC8260 PowerQUICC™ II Family Reference Manual

The PowerQUICC II™ is a versatile communications processor that integrates on one chip a high-performance PowerPC™ RISC microprocessor, a very flexible system integration unit, and many communications peripheral controllers that can be used in a variety of applications, particularly in communications and networking systems.

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