Transmeta Restructures, Swaps CEO

Transmeta announced sweeping changes to the
company’s business model along with a top executive change to support
it.

The Santa Clara, Calif.-based firm said it will now primarily be
known as a technology and intellectual property licensing company with
special engineering services also available.

Transmeta said it has scaled back its chipmaking portfolio to
include only its 90-nanometer (nm) Efficeon chip — for “select customers” only. It
will end-of-life its current Crusoe and 130nm Efficeon semiconductor
products. The company said it was increasing prices and asking for pre-payments
for parts in a new pay-as-you-go operating model.

As part of the restructuring, the company’s board of directors
promoted Arthur (Art) Swift to president, CEO and board member.
Previously, Swift served as senior vice president of marketing and was
behind the company’s licensing and service business, which grew from
$1.1 million in 2003 to $10.7 million in 2004.

Swift replaces Matthew Perry, who helped build the company over the
last three years. Terms of Perry’s departure were not disclosed.

Transmeta will cut 67 mostly manufacturing
and marketing jobs in the restructuring. The company now has 208 employees
around the world.

“This is not just a new chapter in the life of Transmeta. This is a
whole new book,” Swift said during a conference call with press and
analysts.

The restructuring comes after the company hired an independent firm
to critically evaluate its business opportunities and competitive
conditions in the market for x86-compatible microprocessors. While
Transmeta’s focus on low power consumption and long battery life for fanless PCs
and embedded systems managed to shake the trees of Intel and AMD , the company that once boasted
Linux creator Linus Torvalds on its payroll suffered over the last year
from a string of quarterly financial losses.

One aspect of the reorganization plan that was not discussed back in January is the addition of a 100-person engineering
service led by CTO Dave Ditzel.

The group’s first assignment is to work with Sony Group on expanding Sony’s adoption of Transmeta’s LongRun2
technology for its Cell derivatives and to collaborate in other
engineering areas.

Swift said the engineers for hire have also been actively engaged
with an unnamed partner for a non-recurring engineering (NRE) contract
over the last few quarters.

“We have been collaborating with this partner, and we may derive
additional business going forward because of it,” Swift said.

Beyond the designs for its Efficeon and Crusoe chips, Transmeta is
offering licenses for its Microsoft-enhanced AntiVirusNX technology;
its battery and transistor power management enhancements, LongRun
and LongRun2; and its Code Morphing tools. So far, most computer makers
are interested in saving power. In addition to Sony, Transmeta has
licensed LongRun2 to NEC and Fujitsu.

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