Intel trumps Transmeta

January 30, 2001: 7:04 a.m. ET

Company's new low-power chips aimed at ultralight notebook market
By Staff Writer Richard Richtmyer

NEW YORK (CNNfn) - Intel is turning up the heat on its competitors in the market for low-power chips used in portable computers.

The world's largest chip maker Tuesday is expected roll out two new low-power mobile PC microprocessors, one of which will power an IBM notebook computer that had originally been expected to sport a processor from upstart chip maker Transmeta.

IBM's latest ThinkPad notebook, expected to be unveiled this week in Japan, will be the first system to use the new Ultra Low Voltage mobile Pentium III processor, which is the first such chip to operate under 1 volt while consuming less than half a watt of power.

The 500 megahertz chip is built on Intel's existing Pentium III architecture and obtains its low-power characteristics using a technology Intel calls SpeedStep. That technology enables the processors to operate at lower speeds when the computer is running on battery power and higher speeds when plugged in.

The Ultra Low Voltage Pentium III operates at less than 1 volt and consumes less than half a watt of power when operating on battery power and its speed is stepped down to 300 MHz.

Transmeta's "Crusoe" processors, which were introduced a little over a year ago, operate at just under 1 watt. They achieve their low-power characteristics using a patented technology called "code morphing," which means they use software to translate the instructions typically handled directly by the transistors on other chips.

With the introduction of its latest mobile processors, which are designed for "ultralight" portable computers weighing less than three pounds and measuring one inch or less in height, Intel executives said they are laying down a new threshold for power and performance.

"We are establishing a new standard for low power in a PC processor," Frank Spindler, general manager of Intel's Mobile Platforms Group, said in an interview with CNNfn.com.

"This means that users of even the smallest, lightest systems will have both Pentium III performance levels, but also the best battery life," Spindler added.

Executives at Transmeta, whose chips have been showing up in a growing number of portable computers and Internet access terminals, said they were encouraged to hear that Intel is stepping up its development of chips for ultralight computers.

By doing so, Intel is validating the growth potential Transmeta identified when it began building its business more than three years ago, they said.

"We're very happy that the vector we called is now being ratified by the market leader," said James Chapman, Transmeta's senior vice president of sales and marketing.

Chapman also rejected the idea that IBM's decision not to use a Crusoe processor in the ThinkPad was based on shortcomings in its technology.

At a PC trade show last year, Transmeta showed off a prototype of the ThinkPad powered by a Crusoe processor. Then, just before Transmeta's hotly-anticipated initial public offering, IBM said it would not use the Crusoe processor.

"That was an inside deal at the management level to buy Crusoe out," Chapman said.

In addition to the Ultra Low Voltage Pentium III, Intel is expected to introduce the Ultra Low Voltage mobile Celeron processor, which is aimed at the lower-cost ultralight notebook market. In 1,000-unit quantities, Intel is selling the Ultra Low Voltage Mobile Pentium III and Celeron processors for $208 and $118 respectively.

Intel (INTC: Research, Estimates) shares ended Monday's session up $1.19 at $37.06. Transmeta (TMTA: Research, Estimates) shares rose $2.50 to $29.62.