A microprocessor is a computer processor containing the functions of a CPU on a single integrated circuit. This greatly reduces processing costs. As designs improve, manufacturing costs stay the same despite components shrinking. A microcontroller is a microprocessor with additional memory and input/output peripherals integrated onto a single chip. Microcontrollers are widely used in embedded systems and devices to digitally control functions. The key difference is microcontrollers have additional integrated components beyond just the CPU.