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Transmeta ups chip speed
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June 25, 2001: 2:06 p.m. ET
Company rolls out 800 MHz 'Crusoe,' aims for 1 GHZ version next year
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NEW YORK (CNNfn) - Silicon Valley upstart Transmeta on Monday introduced the newest version of its microprocessors, which it claims deliver up to 50 percent higher performance and consume 20 percent less power than their predecessors.
Transmeta, whose shares took a beating last week after it warned of a substantial shortfall in its second quarter, said the new chips will be manufactured by Taiwan Semiconductor Manufacturing Co. using a 0.13-micron process technology, allowing for finer lines to be etched onto the silicon wafers.
Using a manufacturing process that enables finer line widths produces faster chips and yields more chips for each silicon wafer produced. The company's previous chips were built on a 0.18 micron process under a manufacturing agreement with IBM's Microelectronics Group.
Santa Clara, Calif.-based Transmeta has been selling its "Crusoe" brand processors since September 2000. They are designed specifically for portable computers and Internet access devices where low-power is important because it improves battery life.
The newest version, called the Crusoe 5800, will operate at a maximum speed of 800 megahertz and cost $198 in units of 1,000. Transmeta said the new chips are immediately available and it expects customer product announcements based on the new chips throughout the balance of this year.
The company said versions of the 5800 operating at 700 MHz, 733 MHz and 766 MHz also are available, and it expects a 1GHz TM5800 to be available in systems during the first half of 2002.
Transmeta's processors have been making their way into a growing number of computing products since the company first introduced them. The company currently lists the six largest Japanese notebook manufacturers on its roster of customers, including Toshiba NEC, Fujitsu, Sony, Hitachi and Sharp.
Executives of Transmeta (TMTA: up $0.28 to $6.04, Research, Estimates) have outlined a strategy under which they said they are aiming to establish a foothold in Japan, and then use it to push into the United States and Europe.
But the company hit an unexpected snag along the way. Saying the economic weakness which has weighed heavily on the chip business in the United States appears to have spread to Japan, the company said last week that it expects second-quarter sales to be as much as 45 percent below the $18.6 million it reported during the first quarter.
Previously, Transmeta had expected sales to be flat-to-slightly up in the current quarter, guidance it had reiterated just weeks before warning of the shortfall. Its shares fell more than 50 percent on the news.
The company also is facing increasing competition from Intel, the world's largest supplier of PC processors, which has stepped up its efforts in the market for mobile chips.
Transmeta's Crusoe processors achieve their low-power characteristics using a patented technique the company has dubbed "code morphing." That means they use software to translate the instructions typically handled directly by the transistors on other chips.
The code morphing technology allows Crusoe processors to adjust the clock speed at which they operate depending on the specific task, which Transmeta says enables them to use less power and run cooler than competing processors.
For its part, Intel (INTC: up $0.91 to $28.42, Research, Estimates) has introduced a new line of mobile Pentium III processors that offer similar low-power characteristics to Transmeta's Crusoes.
Intel's chips use a technology it calls "SpeedStep," which enables the processors to operate at lower speeds when the computer is running on battery power and higher speeds when plugged in.
Advanced Micro Devices (AMD: up $0.37 to $25.04, Research, Estimates) also recently introduced a new line of mobile processors, called "Athlon 4." 
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