Transmeta Takes a Hit

The chip maker lost $22 million in the second quarter and saw revenue drop by $2.4 million over the same year-ago period.

Chip maker Transmeta Corp. lost $22 million in the second quarter and saw revenue drop by $2.4 million over the same period last year.

However, the Santa Clara, Calif., companys loss, reported Thursday, was almost $14 million less than the $35.6 million it lost during the second quarter of 2002.

The numbers during the three months ended June 27 came as Transmeta gained several customer wins—in particular, Hewlett-Packard Co. using the companys Crusoe TM5800 processor in its HP Compaq Thin Client t5700—and continued gearing up for the third-quarter launch of its new chip, the TM8000, code-named Astro. The company has high expectations for the chip, according to President and CEO Matthew Perry.

"We continue to expect notebook design activity to shift to our TM8000 processor beginning in the fall, with the high volume opportunity occurring in the spring of 2004 for mainstream notebooks and other form factors," Perry said in a prepared statement.

Transmetas low-powered Crusoe processors are designed for ultra-light notebooks and other mobile devices, although company officials hope that Astro—with its enhanced Code Morphing Software and lower power consumption—will help it move up the food chain and into such products as ultradense blade servers and larger notebooks.

Perry expects the TM8000 to be 50 to 80 percent faster than the companys current chip.

"The combination of higher clock speed and improved efficiency should allow us to expand our served market," he said.

Most of Transmetas success has come overseas, although it has made strides in the U.S. market. HP is planning a pilot program with its Compaq Tablet PC TC1000, which will be powered by a TM5800, and Microsoft Corp. named Transmeta as a reference design partner for the next generation of its Smart Display touch-screen monitors.

But the Astro chip will be a key driver for the company. Perry said the company has sampled 1.1GHz versions of the chip, with good customer feedback. Since the beginning of the year, Transmeta also has worked to expand its markets, including into the embedded space, and said it will embed wireless security features onto its TM5800 chip.