Transmeta (Semiconductor) (TMTA)

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Interesting opinion I highlighted:

Intel sued for patent infringement
15 October, 2006
By Paul Weinberg


Transmeta, a small player in the microprocessor industry has filed on Oct. 11 a patent infringement law suit against Intel in the United States District Court in the state of Deleware.

The allegations involve a number of US patents Transmeta is stating that Intel has infringed in power efficiency technologies and such product lines as Pentium III, Pentium 4, Pentium M, Core and Core 2.

The company is seeking a court injunction against Intel's continuing sales of these products as well as monetary damages.

Company spokesperson and director of marketing Greg Rose stated that Transmeta was forced into litigation following a period of negotiations with Intel. He would not discuss the length of time the two companies talked nor how much money Transmeta is seeking from Intel.

"I cannot tell you how long we have been talking to [Intel]," he stated. "This lawsuit was just filed. The judge hasn't been assigned yet. So, we are not making speculations of that nature right now"

Also, Transmeta has no plans to sue PC manufacturers which have been using the Intel microprocessors that are under the legal spotlight, Rose continued. "This is strictly Intel and us."

Meanwhile, industry analyst Charles King, the principal for Pund-IT, doubted that this lawsuit will be lengthy, as has occurred in other widely publicized patent infringement cases.

"I really think this is Transmeta's way of essentially trying to force Intel to take its settlement talks more seriously. I would expect a settlement, a kind of buying your way our of trouble settlement."

As a result of suffering significant losses, Transmeta last year left the chip production business to focus on leveraging its intellectual property assets, suggested King.

He noted that Transmeta was the first microprocessor company in 2000 to come out with a chip technology with power conservation features, but the market was not yet ready for it, then.

Transmeta was targeting the makers of ultra portable or ultra light weight portable PCs market, with a much lighter and longer vendor battery life and much lighter form factor than other companies, King recalled.

However, he added, this new player was up against bad timing, high upfront costs in the hundreds of millions of dollars required for the development and production of a new chip architecture and the dominance of the microprocessor industry by Intel.

A publicly traded company with annual revenues of about $72-million (US) and employing about 200 people, Transmeta has maintained a close relationship with Intel's main rival, AMD.

The only microprocessors that Transmeta is producing nowadays involves its Efficeon which is being remarketed by AMD as a hardware foundation for Microsoft's FlexGo pay-as-you-go and subscription technology for emerging markets, explained Greg Rose.

"In March of last year, we restructured our business and increased our focus on IT licenses. We were able to keep all of our engineers; however we did make cutbacks, mainly in marketing and sales."

Transmeta is also licensing its LongRun2 technology for power management and threshold voltage control to NEC, Fujitsu, Sony and Toshiba.


http://www.echannelline.com/usa/story.cfm?item=21280