Transmeta Begins Production of 90-Nanometer Efficeon Processor

Transmeta Corporation announced that the Efficeon TM8800 has achieved limited production status after passing Transmeta’s quality requirements.

The Efficeon TM8800 is manufactured using a 90-nanometer process technology at the Fujitsu Electronics Akiruno Advanced Technology Center near Tokyo. By using this process, the initial 90-nm TM8800 shipments will offer a clock speed of up to 1.6 GHz. The 90-nm technology also reduces die size and manufacturing costs.

“Our achievement of limited production status for our 90-nm Efficeon TM8800 is a key milestone for Transmeta. We set aggressive goals for our 90-nm program, and we have realized impressive results with our first products,” said Matthew R. Perry, president and CEO of Transmeta.

“Our new 90-nm Efficeon with clock speeds of up to 1.6 GHz offers a 60 percent frequency improvement over the previous 130-nm 1-GHz version.”

Financial Outlook

In conjunction with its announcement of limited production of its 90-nm Efficeon TM8800, Transmeta also updated its financial outlook by announcing that its total revenue for the third quarter ending September 24, 2004, is now projected to be between $6.8 million and $7.5 million.

This total includes projected product revenue of between $3.1 million and $3.8 million, and expected license revenue of about $3.5 million from Transmeta’s first LongRun2 licensing partner for the transfer of LongRun2 technologies.

According to the company, license revenue for the third quarter might vary depending upon final acceptance of Transmeta’s completed deliverables.

Earlier Projections

This updated outlook compares with the Company’s earlier projection, made in connection with the release of its second quarter results, that its third quarter revenue would be between $8.0 and $8.7 million, about $3.5 million of which was expected from Transmeta’s first LongRun2 licensing partner for the transfer of LongRun2 technologies.

“Our achievement of limited production has enhanced our product position, but our current quarter sales will reflect our constrained product availability as we moved through our 90nm product qualification process,” said Perry.

“In addition, our sales will be significantly affected by softening demand in the enterprise sector and by our customers’ product lifecycle-related transitions within their Transmeta-based product lines.”

Transmeta will report its third quarter 2004 results on October 20, 2004.

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