Transforming Transmeta - Page 2

Microsoft, meanwhile, is using Transmetas engineering services to help it with a "proprietary project," Swift said.

"It involves products as opposed to a pure licensing play," Swift said. Its "smaller than Sony, but its indicative that giants of the industry are looking to Transmeta for our expertise."

For its part, NEC has said it wants to use LongRun2 in everything from cellular phones to servers, Swift said.

Transmeta is also moving ahead with a reduced version of its chip business.

Its selling its Crusoe line and an earlier version of its Efficeon chip, built using a 130-nanometer manufacturing process, to Technology Ltd. of Hong Kong., which SEC filings say agreed to pay $15 million up front for the chips and provide Transmeta with ongoing royalties, will use the chips to create computers for the Chinese computer market, Swift said. The transaction is expected to close in the fourth quarter.

Transmeta will continue on with its 90-nanometer Efficeon line. Although it will make improvements more slowly due to its services commitments, it has at least one new client for Efficeon.

Fujitsu Computer Systems Corp., Fujitsu Ltd.s Sunnyvale, Calif.-based computer arm for the United States, is about to update its LifeBook P1000 with an Efficeon processor. Right now the machine comes with an 800MHz Crusoe TM58000 chip.

Ultimately, however, Transmeta has shifted from selling chips to selling itself.

"The service component is getting our power management technology into as many applications as possible," Swift said. "At the end of the day, our interest is in seeing our LongRun2 technology in chips that are going to sell in the millions of units per year."


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