Transmeta Microprocessor to Challenge Intel’s Hold

Transmeta Corp., a privately owned chip maker based in Santa Clara, Calif., made a big splash at a computer trade show this week by showing off a range of laptop machines powered by its low-power microprocessors that will compete with mighty Intel.

Transmeta’s low-power chips, called Crusoe, were featured in demonstration laptops by IBM, NEC, Hitachi and Fujitsu as well as other devices at PC Expo, an annual trade fair, where it won Best of Show honors.

The major innovation in the Crusoe chip is that it includes some embedded software.

The software programming in Transmeta’s chips also reduces the number of transistors needed. That, in turn, reduces the amount of power required to run the machines that use the chips--so batteries can last roughly twice as long.

“There are other tricks, but that’s the most important one,” said Transmeta Chief Executive David Ditzel. “Software doesn’t consume power.”

The second big thing about the low consumption of power is that the chip gives off less heat than do conventional chips by Intel or Advanced Micro Devices.

With less heat, manufacturers don’t have to install fans and ventilation ducts. Computer buyers at the trade show said they were stunned by how light and silent the machines were using Transmeta’s microprocessors.

The lack of noise also prompted Transmeta to work with Rebel.com of Ottawa on a wireless home-networking product similar to Apple Computer’s. The devices link home computers and other devices without cable connectors.

Rebel.com and the laptop manufacturers said they plan to ship Crusoe-based products to stores and consumers this year.

An official with IBM, which manufactures the chips under a contract with Transmeta, said its Crusoe laptops will probably be priced the same as its regular high-end versions, beginning around $2,000.

Transmeta was founded five years ago and has received funding from Microsoft co-founder Paul Allen and financier George Soros. And one of Transmeta’s chief engineers is Linus Torvalds, the Linux operating system inventor.

In April, Transmeta raised an additional $88 million from investors including America Online, Compaq and Gateway Computer.

Last month, Gateway said it would team with America Online to sell an Internet-access appliance that relies both on Transmeta chips and the free Linux operating system, a slap to the dominant but waning market power of Intel and Microsoft.