EE Times: Transmeta alters plans, buys back technology licenses

“Microprocessor startup Transmeta Inc. (Santa Clara, Calif.) has
quietly changed its business plan. The company has bought back its
two main technology-licensing agreements from IBM Corp. and Toshiba
Corp., and now plans to market products on its own as a fabless
chip supplier….”

“Under the technology license agreements it had reached with IBM
in 1997 and with Toshiba in 1998, Transmeta gave those companies
the right to make and market X86-compatible products based on its
technology. Revenue from these deals constituted “substantially
all” of Transmeta’s revenue in 1997, 1998 and 1999, the company

“By amending its agreement with IBM in November 1999 and with
Toshiba in February 2000, Transmeta is now dependent solely on its
own product sales – which have only just begun, and not yet in
volume – through OEMs and distributors….”

Analysts said the move will benefit Transmeta in the
long-run, but question its short-term prospects on the
technology-heavy NASDAQ exchange.