Transmeta pushes on, plans Astro launch

Manufacturing miscues, management shakeups, and a flagging technology industry have made for several tough years at Transmeta Corp. Undaunted, the upstart chip maker is set to again challenge giant Intel Corp., boasting a handful of new design wins and a brand new mobile processor.

The company recently demonstrated an early version of its upcoming processor code-named Astro, at the Consumer Electronics Show in Las Vegas. Executives were eager to tout some new products using Transmeta's Crusoe 5800 chip, and to talk about the company's future.

Astro is Key

Transmeta plans to ship its first Astro TM8000 processor in the third quarter of this year. Built brand-new from the ground up, the chip represents the company's future, and executives are confident it will bring success.

"This will drive us into mainstream notebook," says Michael DeNeffe, director of marketing. "And it is going to be very competitive with Banias." Banias is the upcoming mobile-only chip from Intel, which recently officially branded the processor and its surrounding technologies Centrino. Intel plans to ship it in the first half of this year.

Astro represents a significant leap forward in technology for Transmeta, DeNeffe says. The current Crusoe 5800 is a four-issue processor; Astro doubles that with eight 32-bit instructions per clock, making it a 256-bit chip. The end result: A processor that completes more work per clock cycle while continuing to run at low power.

"It's a dramatic improvement over the 5800," he says. The chip provides better overall performance and can launch applications up to 40 percent faster than the 5800.

These traits should appeal to vendors making 12- to 14-inch notebooks, a market that where Transmeta would like to compete with Intel, he says.

The company hasn't announced clock speeds for the Astro chip yet, but its focus on better performance per clock tick suggests that megahertz won't be top priority. In a market bred to love speed, that can be tough; but Intel will likely face the same situation with Centrino.

In fact, Transmeta is counting on Intel's larger marketing budget to lead the way in continuing to educate buyers that GHz isn't everything, DeNeffe says.

The company is confident its new chip can give Intel's a run for its money, he says, and at a significantly lower price.

Crusoe Steams Ahead

In the meantime, Transmeta continues to sell its Crusoe 5800 chip, and recently launched an embedded version called the 5800SE.

One of the anticipated upcoming products to use the 5800 is OQO's ultra-personal computer, a hand-sized unit that has all the power and features of a full-sized notebook for about US$1500.

Due in the second quarter of this year, the unit will run Windows XP. "It is your one computer in the same way that your cell phone can be your one telephone," says Colin Hunter, president of OQO.

Transmeta's DeNeffe says the company has been pushing modular computing for some time, and is proud to be inside the OQO product. "This is a great product with off-the-shelf technologies, great integration, and some proprietary power management technologies."

The 5800 will appear in another modular computer from Antelope called the Mobile Computing Core. Based on IBM technology, the unit is about the size of a laptop battery. It's a fully operational computer that you slide into a desktop or notebook shell to use.

The 5800 is also finding its way into new Tablet PCs and Smart Displays based on Microsoft's technology, he says. Among the company's key wins in this area is Compaq Tablet PC TC1000 from HP that's been shipping since November.

"Tablet PC is very important to us," he says. And having a major U.S.-based vendor like HP choose Transmeta for its tablet PC was a big win for the company, he says.

It's something the company has yet to do on the notebook side. While it's made strides with vendors in Japan, the company is still waiting for a break in America.

DeNeffe admits it would be good to have a U.S. vendor sign on for Astro, but the company doesn't need it to survive. "It would be nice to have, but it's not necessary. A single U.S. manufacturer is just a small part of the bigger market."

Renewed Optimism

Transmeta can worry about winning over domestic vendors later; what's important right now is finishing Astro and shipping it on time, DeNeffe says. It was manufacturing problems in 2001 that led to long delays on the 5800.

"We had a stutter step in 2001 going to the new process," he says. The company transitioned its chips from .18 micron to the more efficient .13 micron at that time. At the same time it was transferring its manufacturing from IBM to Taiwan Semiconductor Manufacturing Company. The combined problems led to delays of about six months he says.

In the meantime, management shakeups saw Chief Executive Officer Mark Allen forced out and eventually replaced by current CEO Matthew Perry. The company was also forced to downsize, cutting its staff from a high of 450 to 290 now.

Now, the once showy company--which made enough noise before its initial launch to get Intel's attention--is ready to move forward, quietly creating new and better processors and delivering them on time, DeNeffe says.