Transmeta Ships Efficeon, Lowers Revenue Outlook

The company starts limited shipments of its 90-nanometer Efficeon processor and also lowers projections for its third-quarter revenues.

Transmeta Corp. has begun limited shipments of the next generation of its Efficeon processor, which is being built on the 90-nanometer manufacturing process.

However, that same achievement—the 90-nm process allows for more transistors on a chip and reduce manufacturing costs—contributed to the Santa Clara, Calif., company lowering its quarterly financial expectations on Friday. Transmeta is now projecting third-quarter revenues of $6.8 million to $7.5 million, lower than the $8-million to $8.7-million range the company had earlier estimated.

"Our achievement of limited production has enhanced our product position, but our current quarter sales will reflect our constrained product availability as we moved through our 90-nm product qualification process," President and CEO Matthew Perry said in a prepared statement.

Other contributing factors included slowing enterprise demand and customer product lifecycle decisions, Perry said.

The new Efficeon TM8800, built at the Fujitsu Electronics Devices Group Akiruno Advanced Technology Center in Japan, runs at 1.66GHz, and the company expects to sample processors running at 2GHz by the end of the year, officials said.

The current TM8600 tops out at 1GHz.

Transmeta said Sharp Corp. this month will begin shipping a new notebook powered by the Efficeon TM8800. In addition, startup Orion Multisystems Inc.—founded by former Transmeta officials—will use the chip in its clustered workstations that will begin shipping this month.

Along with the faster speeds, the TM8800 processors also feature Transmetas new AntiVirusNX security technology, which works with the data execution protection feature in Microsoft Corp.s Windows XP Service Pack 2.

The Efficeon family of processors has taken over for Crusoe as Transmetas key technology. Like Crusoe, Efficeon is designed for high performance, long battery life and energy efficiency, through technology such as Transmetas code-morphing software, which enables it to run Windows and x86-based applications, and the LongRun 2 power-saving feature. In addition, it offers high-speed HyperTransport links between the processor and the rest of the computer.

Despite such features, Transmeta over the past few years has been hampered by costly delays and fierce competition from larger competitors such as Intel Corp. and Advanced Micro Devices Inc.

/zimages/2/28571.gifClick here to read about how Transmeta is targeting the Centrino market with Efficeon.

Transmeta officials are hoping that Efficeon will help the company get established in larger products, including notebooks with 12- to 14-inch screens, PC blades and tablet PCs. There has been some success in the United States—Hewlett-Packard Co. is using Efficeon in its bc1000 PC blade systems—but most of the success has been overseas.

Late last year, Transmeta partnered with thin-client vendor Wyse Technology Inc. to develop non-PC desktops based on Transmeta processors.

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