NEC Taps Transmeta for the LongRun

NEC Electronics Thursday said it is making an equity investment
into chipmaker Transmeta and tapping into its low-power
technology.

The Japanese computer maker has licensed Transmeta’s LongRun2
technologies for use throughout its 90-, 65- and 45-nanometer generation
semiconductor products. NEC said it also purchased a small percentage of
Transmeta’s common stock, giving it some control in the direction the Santa
Clara, Calif.-based chipmaker turns in the future. Specific financial
details were not available.

The strategic partnership allows Transmeta to continue its quest to out-power rivals like Intel and AMD , but it
also gives San Jose, Calif.-based NEC a way to explore new form
factors. The two companies held a press conference and ceremonial signing
event today in Tokyo to commemorate the agreement.

“NEC Electronics has been promoting research and development of low power
technologies such as parallel processing, multi gate-oxide film and multi
threshold voltage, targeting the markets requiring power efficiency
management,” NEC Electronics executive vice president Hirokazu Hashimoto
said in a statement. “By licensing Transmeta’s LongRun2 technologies, we
will be able to complement our existing low power technologies and lead the
industry in markets such as wireless handsets, broadband networking and
digital consumer electronics where low power is critically important.”

LongRun is Transmeta’s secret sauce that allows both its Crusoe and
Efficeon processors to adjust MHz and voltage at hundreds of times per
second to reduce power consumption. Current releases of Efficeon run at
7 watts. The technology now in its second-generation also addresses
transistor leakage — a growing problem in the semiconductor sector as the
technology shrinks to smaller dimensions along the nanometer
scale. The second generation Efficeon chips are due
out in 2004 and are expected to run from 1.0GHz at 3 watts all the way up
to a 2.0 GHz version that only takes 25 watts of power. A third-generation Efficeon is already being planned.

“Transmeta was able to address this issue first, and NEC’s licensing
validates that it is not only a viable approach to the problem but a
marketable one,” Enderle Group founder and lead analyst Rob Enderle told
internetnews.com. “As a technology company, this validation, which
can both come from licensing and the direct sale of chips that use the new
technology, is necessary if Transmeta is going to continue in its current
role. It also makes Transmeta an important part of NEC’s future and that,
along with Transmeta’s growing relationship with HP, helps insure their
future.”

Enderle says it was Transmeta that woke Intel up, and the result was their
ARM-based chip architecture initiatives: Pentium M and Centrino. Both chips
are purpose-built for mobile devices and laptop computers. But
power leakage problems have persisted in Intel’s designs, which is
one of the reasons Enderle says that Dothan, the next generation of Intel’s
Centrino platform, is not seeing any power efficiency gains.

“To remain a force in the market, Transmeta has to continue to lead in
their chosen space — full-featured portable computers,” Enderle said.
“Their architecture, which is more flexible than Intel’s, can move more
quickly. As long as they can demonstrate the values associated with
these moves, they remain viable. In this way they are kind of like Apple is
to Microsoft.”

In addition to NEC, Transmeta’s marquee relationship remains its partnership with HP , which uses the low-power chips to
run its Compaq Evo Tablet PCs as well as thin clients. Transmeta also has
other partners for its Efficeon chip including ROX for blade servers
, and Sharp and Fujitsu for a new version of a
thin and light notebook.

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