Fast Forward: Transmeta's Rebirth

Nathan Edwards

In the June 2005 issue, my column stopped just short of being an obituary for Transmeta, the feisty company that challenged Intel in 2000 with a new family of low-power x86-compatible processors. Transmeta was nearly dead in 2005, clobbered by Intel’s low-power Pentium M.

Now Transmeta has a second life—and not as an avatar in an online virtual world. This rebirth is for real. In 2006, Transmeta sued Intel in federal court, alleging that Intel had infringed on 11 of Transmeta’s patents on microprocessor-related technology. A few months ago, Intel agreed to settle out of court. Intel is paying Transmeta $150 million up front and another $20 million a year for five years, for a total of $250 million.

This sudden infusion of cash rescues Transmeta from its deathbed. Now debt free with a guaranteed revenue stream for five years, Transmeta has a second chance. What will the company do with the windfall?

Naturally, Transmeta is reluctant to discuss future plans. And frankly, I don’t think the few remaining executives have completely decided what to do yet. Even by Silicon Valley standards, $250 million is big money that creates many opportunities. But one thing is clear: Transmeta won’t repeat past mistakes by again challenging Intel (or AMD) in the x86 microprocessor market. Transmeta’s Crusoe and Efficeon processors have reached the end of their lives, despite the company’s survival.

Instead, Transmeta is licensing its power-management technology to other companies that make processors. Right now, Transmeta’s most valuable technology is LongRun2, which dynamically varies the threshold voltage of transistors to improve their power/performance efficiency. Lowering the threshold voltage allows transistors to switch more quickly, but they leak more current. Raising the threshold voltage reduces leakage but also reduces the switching speed. LongRun2 can vary these parameters hundreds of times per second throughout a chip in response to changing workloads. Transmeta’s remaining engineers—about 40 people, including contractors—are working to improve LongRun2 and develop additional technology suitable for licensing.

Transmeta is eager to license LongRun2 and the earlier LongRun technology to any processor company, including Intel and AMD. (Last summer, AMD invested $7.5 million in Transmeta.) So even though Transmeta’s innovative power-management technology couldn’t save the company’s own processors, it may appear in future processors from Transmeta’s former competitors.

Tom Halfhill was formerly a senior editor for Byte magazine and is now an analyst for Microprocessor Report .

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