Perhaps the decision to name its flagship product after a fictional shipwrecked traveler who spent almost 30 years trapped on a small island was not the best of omens for Transmeta Corp.

The company debuted in 2000 with Crusoe, a new chip with a low-power software-based approach to processing instructions. But four years later, Transmeta has racked up US$591 million in losses and watched its Silicon Valley neighbor, Intel Corp., claim all the spoils from an industrywide move toward low-power mobile processors. Transmeta warned investors in its most recent filing with the U.S. Securities and Exchange Commission earlier this month that the company might be forced to scale back operations to concentrate on its fledgling licensing business if it needs to raise cash in future quarters and runs into problems securing credit.

Perhaps it's a little early to put the nail in the coffin of a company that many in the chip industry wrote off several years ago, but Transmeta is at a perilous stage as Intel continues to dominate the notebook processors market. The Santa Clara, California, company's chances of building on the momentum generated by a well-covered company launch event have run smack into the formidable barriers to entry in the market for PC processors.

In the five years before Transmeta was formally announced in January 2000, press and analysts were told little about what was going on inside the company. They knew its goal was to develop a next-generation mobile processor and its staff included technology luminaries such as Linux developer Linus Torvalds and Bell Laboratories processor designer David Ditzel. When Crusoe was finally unveiled, the PC industry had a chance to peek behind the curtain.

Crusoe's main benefit, and main problem, was its code-morphing software. Transmeta used a 128-bit VLIW (very long instruction word) architecture to build Crusoe, but that architecture was not compatible with the x86 architecture used by Intel and Advanced Micro Devices Inc.'s (AMD's) processors and the vast majority of the world's PC software. So software was used to translate x86 instructions to Transmeta's hardware.

This approach allowed Transmeta to use fewer transistors on Crusoe than most x86 chips, cutting the chip's power consumption. The company recognized early that mobile processors needed to consume a lot less power if mobile computing devices were to take over the PC market.

An additional power-saving software technology called LongRun allowed Crusoe to adjust its clock speed thousands of times a second in sync with the processing requirements of an application. The company promised that users fed up with short battery life would have a better experience with a Crusoe system.

"Transmeta's new idea here was not to use silicon itself to solve the problem, but to use software to solve this problem," Ditzel said at the company's launch event, which was attended by hundreds of print, online and broadcast journalists.

The first Crusoe processors consumed an average of 1 watt of power. Server vendors such as RLX Technologies Inc. were excited by Crusoe's possibilities as the engine behind the new "blade server" concept. RLX pioneered the development of these thin devices, which held out the promise of helping IT managers reduce the space taken up by traditional servers.

Crusoe was ideal for blade servers used to host Web pages because of its power characteristics and efficiency, said Chris Hipp, co-founder of RLX and now an independent technology consultant. These Web servers didn't require the most powerful processors on the market, he said.

However, PC vendors wanted more general-purpose performance. Software simply can't duplicate the raw performance of a well-designed collection of transistors. Early on, the industry knew that Crusoe wasn't the best-performing chip on the market, but Transmeta promised that the chip would have enough performance to satisfy the needs of most PC users.

Early reviews were not kind. The company's decision to keep its product development activities a closely held secret meant that vendors and analysts did not get a chance to evaluate the processor until after it had been announced. Those groups found Crusoe's performance to be much less than advertised.

Sony Corp. was the first PC company to release a Crusoe-based product and it continues to use the next-generation Efficeon processor, along with fellow Japanese PC vendors Fujitsu Ltd. and Sharp Corp. But on the eve of Transmeta's November 2000 initial public offering, and without comment, IBM Corp. canceled its Transmeta-based ThinkPad laptop that already had been demonstrated at the PC Expo trade show earlier that year.

The former Compaq Computer Corp. was said to have flirted with the chip, but didn't ship a product based on Crusoe until the tc1000 Tablet PC was released, after the company was acquired by Hewlett-Packard Co. (HP). Dell Inc. is famous for its arm-in-arm relationship with Intel, and never released a Crusoe notebook.

PC vendors were further disappointed by manufacturing delays, as Transmeta tried to make the jump from 180-nanometer process technology to 130-nanometer process technology in 2001. Transmeta has no manufacturing facilities of its own, unlike Intel and AMD. It relies on third-party foundries to manufacture its designs.

IBM built the first Crusoe chips, but Transmeta chose Taiwan Semiconductor Manufacturing Co. (TSMC) as its partner for the launch of the TM5800 Crusoe chip. Some initial samples of the TM5800 contained flaws, which some observers blamed on Transmeta's design and others blamed on TSMC's ability to transition to the new process generation. Crusoe was the first chip that TSMC tried to build on its 130-nanometer process technology, and process technology jumps are often problematic for both chip designers and manufacturing processes, as has been seen this year with the jump to 90-nanometer process technology.

IDG News Service

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