I was trying to figure out the real reasons why USB signals are converted to RS232 serial. I came to understand that(if I am not wrong) USB is faster and synchronous, whereas the chips are using UART which needs RS232 protocol.
RS232 is an extremely old standard developed in the (relatively) early days of computing. It has been extended to do many things that it was not intended for and had "extra bits" added to it. While RS232 is properly the standard related to the interface and levels the term has in common use been extended to cover most aspects of the interface, data rate, basic communications protocol, connectors and more.
USB is a much more modern standard. It provides a mans of transferring data over short distances at much higher speeds than RS232 is intended to do.
The main reasons for USB to RS232 converters existing are
At one stage almost all "PC's" had a seriel interface - essentially an RS232 interface. Most modern "PCs" no longer RS232 interfaces. Older euqipment with an RS232 interface can often but not always be connected to a PC via an RS232 to USB converter.
The processing & complexity overhead in maintaining a "USB stack" - the software interface to a USB port, is substantial and not easily handled by either entry level programmers or by very bottom end equipment. The interface requirements for RS232 are very modest both in code complexity and code size. They are "easy enough" to program for and easily enough accommodated in he most bottom end of processors with even very minimal hardware resources. Even processors which even Olin or Wouter could not implement USB on can happily handle asynchronous serial communications, which is the heart of RS232.
Are all the chips designed for TTL(RS232) serial data communication? Is that the reason USB is never directly used for data communication with integrated circuits?
That question is slightly confused. RS232 is a serial interface by default. Usually levels of logical 1 ~= - 12 volts and logical 0 ~= +12 volts were used. Some variants use logic 1 = +5V and logic 0 = 0 Volts (ie nomonally (only) TTL levels). This makes it easier to use standard logic ICs operating on 5V. Very simple converters can be used to interface with a true RS232 interface in may bu not all cases. This is a marginal method of operation when working with a "true" RS232 interface and needs care and understanding to work well - and may not work at all in some cases. TTL to TTL works well enough for most purposes.
And one more thing related. When we are uploading sketch(code) to the Arduino micro-controller, we configure the baudrate first i.e. 9600. I think this is the data transfer speed from USB to Arduino.
9600 baud was a very standard data rate historically. It is used mainly because it i a compromise between as fast as possible to be useful and slow enough to work most of the time. Much slower (eg 300 bauds) and somewhat faster (115,200 baud [Are you feeling lucky, Punk?)) can be used. Usually data rates scale up or down by factors of 2 eg 300, 600, 1200, 2400, 4800, 9600, ... . The fact that 115,200 is used in some cases and is NOT a power of 2 multiplier tells you something about how lucky you may need to be.
If USB is converted to RS 232 before reaching to the UART of the ATMEGA what is changing? Voltage level? Baudrate? Is the baudrate still 9600 at the UART?
Everything is changing :-).
RS232 is an unbalanced voltage feed system relative to ground. +/- 12V or 5/- V or ... .
USB is a differential voltage system of +/-%V nominally around a 2.5V centre voltage but that is not part of the signalling system.
USB is multidrop. RS232 is nominally between 2 items of equipment but this has been extended in some of the non standard standards.
RS232 is as dumb as they come. The only control information in the basic standard relates to asynchronous timing, bit length and number of start and stop bits and perhaps parity.
USB has a wealth (or a scourge) of control information as part of the standard.
RS232 data rate is what you set it at. Usually 300, 1200, 8600, ... BUT it could be 237.4 baud if you wished.
Baud rate is not meaningful at a data transfer level for USB. Data rates are increasing as the standard transmogrifies - initially about 12 Mbps with USB1 and now over 1 GB/s in latest version.