Transmeta Expects Big Drop in Sales

Transmeta Corp., a start-up chip maker that competes with Intel Corp., said fourth-quarter sales will plunge because of production problems with new products.

Sales will be about $1 million this quarter, down from $12.4 million a year ago, the Santa Clara, Calif.-based firm said.

Transmeta is in the middle of a manufacturing change to build new chips using smaller wires, a move that helps make tinier, faster processors. The shift has been harder than expected, executives said.

“We fell substantially short of our production goals,” Chief Executive Murray Goldman said on a conference call.

The company’s shares fell 65 cents to close at $2.05 on Nasdaq.