Transmeta nets Toshiba

May 7, 2001: 12:15 a.m. ET

Chipmaker's 'Crusoe' processor will power new notebook computers
By Staff Writer Richard Richtmyer

NEW YORK (CNNfn) - Upstart chipmaker Transmeta has landed Toshiba, the world's largest supplier of notebook computers, as a customer for its low-power microprocessors.

The deal marks one of the most substantial design-wins for the Santa Clara, Calif.-based chipmaker's "Crusoe" processor, and solidifies its strategic position as a supplier of chips for "ultralight" portable computers weighing less than three pounds and measuring one inch or less in height.

"A win with Toshiba really takes them into a whole new category of customers, putting them into the top tier," said Alex Gauna, semiconductor analyst at Banc of America Montgomery Securities.

"The big fish to fry would be Dell, Compaq, Toshiba, Sony and Hewlett-Packard," Gauna added. "If you've got two of the top five, that shows significant market penetration."

Sony has been using Crusoe processors to power some of its "VAIO" brand notebook computers since last September.

Toshiba said its latest "Libretto" notebooks, due to begin shipping in Japan later this month, will be powered by Crusoe processors operating at 600 megahertz. The new systems are 10-1/2 inches wide, less than an inch thick, and weigh in at just 2.4 pounds, putting them in the "ultralight" category.

By combining the power-saving technology Transmeta uses in the Crusoe processors with its own on-board power-management utilities, Toshiba claims the new Librettos can get up to 14 hours worth of battery life.

The Crusoe processors, which are made specifically for portable computers and Internet access devices where low-power is important because it improves battery life, have been making their way into a growing number of computing products since Transmeta first introduced them in Jan. 2000.

While Intel (INTC: Research, Estimates), the No. 1 processor maker, has recently stepped up its efforts in the low-power mobile processor area and offers chips with similar specifications, Transmeta's Crusoe processors differ in the way they achieve their lower power consumption.

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They're designed 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 the 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.

So far, Crusoe chips have been designed into products from a range of companies, including notebook computers offered by Sony, NEC, Fujitsu, Hitachi and Casio.


	James Chapman Senior Vice President of Sales and Marketing, Transmeta. (Courtesy/Transmeta)

Although the Crusoe-based products are primarily available to consumers in Japan, where ultralight notebooks are more popular, James Chapman, Transmeta's senior vice president of sales and marketing, said the company's latest design win plays well into its long-term strategy of establishing a foothold in Japan, and then pushing into the United States and Europe.

"We're very happy with our strategy of winning big in Japan, dominating the ultralight segment and exporting that strategy to the U.S. and European markets as time goes by," Chapman said in an interview with CNNfn.com.

"We have done that with Sony and NEC, which have machines in the U.S., although Sony's the only one with a major retail presence right now," Chapman added. "But the bottom line is we're very pleased with the way this is going, and we think Toshiba has an impact on broadening that Crusoe penetration as we go forward."

One of Transmeta's other Japanese customers is expected to announce this week that it will begin shipping a Crusoe-based notebook computer to customers in the United States, sources said.

Shares of Transmeta (TMTA: Research, Estimates), which have fallen more than 68 percent during the past year, ended Friday's session down 95 cents at $14.57.