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Transmeta Gets $150 Million for Intel Lawsuit Settlement

The money will help the company return to profitability

Feb 11, 2008 14:09 GMT  ·  By
The Long Runner2 suite might be Transmeta's saviour
   The Long Runner2 suite might be Transmeta's saviour

Intellectual property company Transmeta has received the first $150 million as part of the deal inked with chip manufacturer Intel. The ex-supplier of low-voltage x86 CPUs is currently developing and licensing microprocessor technologies with the accompanying intellectual property. Immediately after the transition, Transmeta sued Intel over some alleged infringements upon ten of Transmeta's patents regarding chips' power efficiency and processor architecture.

Transmeta received the first payment on January 28, according to Sujan Jain, Transmeta's chief financial officer, and the company is focusing on evolving its business model in order to generate profit. The ex-chip manufacturer was severely admonished by investment firm Riley, one of its shareholders, regarding the company's bad management. Riley is also displeased with the company's business strategy based on the LongRun2 technology - a collection of technologies that allows for advanced power management and the so-called "leakage control".

However, Transmeta claims that the company is back on track with the LongRun2 suite. For instance, NEC announced last year that it will develop about one million mobile phone chips a month until 2008, which should allow the company cash-in about $215,000 in LongRun2 royalty revenue. Jain claims that this would be quite an improvement, given the fact that Transmeta could only squeeze $44,000 in revenue last quarter.

According to Jain, Transmeta has been improving its business strategy, and now the company is focusing on building IP (Intellectual Property) modules to be licensed to smaller, fabless chip design companies, rather than to big enterprises, with strong engineering staff and know-how. The new business model will allow the intellectual property provider to expand the LongRun2 products and squeeze constant, substantial revenue during this year.

The company will give further details about receiving the whole $250 million from Intel when it posts the results of its financial situation for the last quarter of 2007.