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Transmeta makes splash
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June 27, 2000: 6:53 p.m. ET
Startup chip maker's 'Crusoe' processor draws big-name backers
By Staff Writer Richard Richtmyer
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NEW YORK (CNNfn) - Startup chip maker Transmeta made some waves at the PC Expo trade show here Tuesday where it showcased products from four major PC makers which use its low-power "Crusoe" microprocessor.
In what founder and chief executive David Ditzel described as the company's "coming out party for systems," Transmeta demonstrated working prototypes of Crusoe-based notebook computers from IBM, Hitachi and NEC. Fujitsu also has agreed to use Crusoe processors in one of its upcoming notebook computers.
All of them expect to begin shipping the machines to customers by the end of the year.
It was the second major customer announcement the privately-held company has made since it took the wraps off the Crusoe processor in January, and some say it is poised to shake up the status quo in the computing world.
The Crusoe chips are designed using a patented technique the company calls "code morphing." That means they use software to translate the instructions typically handled directly by the transistors on other chips. By doing so, the Crusoe processors can adjust the amount of power they consume for specific applications, Ditzel said.
 By using the code morphing technique, the chips can mimic the performance of chips based on Intel's x86 architecture, which represents the largest installed base of computers worldwide.
Last month, Gateway and America Online said they would use Crusoe chips in their Internet access devices set to hit the market later this year.
With the growing industry support for Transmeta, some market observers said there is a growing battle between the upstart and chip titan Intel in the market for portable computers.
For its part, Intel earlier this month introduced a new Pentium III mobile microprocessor that offers similar power-consumption features to the Crusoe. And to its advantage, Intel already is shipping those parts in volume.
Though each has certain advantages and disadvantages, the low-power processors from both companies are priced at roughly $300.
Despite the apparent rivalry building between the two companies, Ditzel said Transmeta is more interested in extending the already pervasive x86 computing platform into new areas than in trying to wrestle an 800-pound gorilla.
 "People like to say we're at war with Intel," Ditzel said in an interview with CNNfn.com. "But I like to say we're going to expand the market."
"We're not trying to displace, but embrace the marketplace," Ditzel added.
In addition to the notebook computers, Transmeta had several "information appliances" that are still in the conceptual stage on display at the show. The company also is working with Microsoft on development of a "Web pad" product based on a Crusoe processor, Ditzel said.
Ditzel said the flexibility of the Crusoe chips' code-morphing technology will work particularly well in Internet-access devices and other information appliances, which represent a very large potential market into which the company can extend the x86 platform.
Technology research firm International Data Corp. recently said it expects U.S. unit shipments of those types of devices to outnumber consumer PCs by 2002.
"We expect to sell a lot of chips," Ditzel said.
Although he would not provide specifics, Ditzel said more product partnership announcements are on the horizon.
Founded in 1995 through venture capital, Santa Clara, Calif.-based Transmeta recently received additional funding from several technology companies including Gateway, AOL, Compal Electronics, Compaq, First International Computer, Phoenix Technologies, Samsung, Sony and Quanta Computer.
Ditzel said he expects Transmeta to begin turning a profit sometime in 2001. 
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