Transmeta Finds A Buyer And Investor In NECTransmeta Finds A Buyer And Investor In NEC

Microprocessor company Transmeta Corp. says NEC Electronics has become the first company to license Transmeta technology for reducing the "leakage" of electrical current in computer chips. In addition, the companies say Japanese chipmaker NEC took an approximately 2% stake in money-losing Transmeta in December.

Transmeta, which makes low-power chips and associated software for laptops, tablet PCs, and other computing devices, last fall introduced technology called LongRun2 to address an industrywide problem caused by the leakage of electric current in chips that happens as chip components shrink to miniscule sizes. The leakage can cause computers to overheat, degrade their performance, and reduce manufacturers' percentage of usable chips in a batch. NEC Electronics says it has licensed LongRun2 for use in chips made with 90-, 65-, and 45-nanometer processes. A nanometer is one-billionth of a meter.

Leakage is becoming a "colossal problem," says John Heinlein, director of strategic-partner initiatives at Transmeta. "As [NEC] moves into these smaller geometries, they--like everyone else in the industry--are up against transistor leakage."

In addition to the licensing agreement, NEC will pay Transmeta a royalty on chips sold using LongRun2. NEC bought about 10% of 25 million shares that Transmeta put up for sale in December, according to Heinlein. Shares of Transmeta closed Wednesday up 13 cents, at $3.59.

Earlier this month, Transmeta restated its 2003 results to reflect additional expenses related to bad-debt exposure, and posted an $87.6 million loss for the year. Computer makers including Hewlett-Packard and Sharp Corp. use Transmeta chips in some of their products.

LongRun2, which Transmeta uses in its own Efficeon chips, uses hardware and software techniques to change a processor's "threshold voltage" hundreds of times per second to control the leakage of electricity from transistors. Lowering a processor's performance in some situations to check the leakage of current can result in better-performing computers and higher manufacturing yields, says Heinlein.

Transmeta isn't alone in addressing leakage. In November, Intel said it had identified a new insulator that could be used in PCs, servers, and handheld computers to reduce current leakage. Intel says the insulation material, called High-K, could replace silicon dioxide in its products by 2007.