Zeev, Larry, our chip guy who followed the Embassy development, Red_Bread, has had health problems and has not been around lately. I am not a qualified replacement, but here are some things I recall.
Embassy is a complex chip exceeding that of a very high end graphics chip. Also, prospective customers demanded flash memory to protect against a power outage. The Embassy OS and all Applets run only in the E2 and must *never* be touched by Windows.
The flash technology (maybe this has changed) meant the E2 die had to be two generations behind the most current. This also means that the E2 was too large to fit on available MB real estate and the cost was too high for the taste of the TCPA, now TCG and Microsoft. Atmel failed in their initial commitment to build the E2, setting Wave one to two years behind. It took a long time but Samsug finally delivered and we are in two smart card readers and a keyboard.
Yet, Intel may figure something out.
Hope this history helps.
Nick