Transmeta (Semiconductor) (TMTA)

[DewDiligence]

Posted by: DewDiligence
In reply to: sf_tal who wrote msg# 4504 Date:4/17/2004 6:15:41 PM
Post #of 4915

>> DEW: you are advancing an either/or scenario here. <<

Not at all. The futility of TMTA’s CPU business is a separate matter from the potential of the licensing business. I say that the CPU business is worth nothing because it simply doesn’t work, mathematically.

Even under the most favorable assumptions, TMTA’s gross profit per chip is so small that a colossal chip volume would be needed merely to cover the R&D and corporate overhead. Such a volume would take years to achieve, if it can even be done at all.

A better plan is to lay off most of the engineers and salesmen, and slash expenses to about $20M per year. They can keep enough staff to respond to any pressing concerns by existing and prospective licensors and to deposit the royalty checks.