IBM Scraps Plan to Use Transmeta Chips

IBM Corp. has canceled plans to use an energy-saving chip manufactured by Transmeta Corp. in its upcoming laptop computers, deflating the upstart’s balloon the week before it goes public. IBM instead will continue using Intel chips--the Pentium III and Celeron--in its ultralight ThinkPads, due to roll out in the fourth quarter, company spokesman Tim Blair said. He would not say whether the decision was related to proTRANSMETA CORPduct performance, engineering problems or marketing issues, exacerbating the skepticism surrounding Transmeta’s outlook before its scheduled Nov. 6 initial public offering. IBM rose $3.38 to close at $101.94 on the New York Stock Exchange.