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Transmeta may file for public offering this year

Although the upstart?s widely publicized chips have yet to hit the market, Transmeta may try to go public before the end of the year, its CEO says.

SAN FRANCISCO--Although the upstart?s widely publicized chips have yet to hit the market, Transmeta may try to go public before the end of the year, the company's chief executive said today.

Chief executive Dave Ditzel told analysts and reporters at the Banc of America Securities conference here that the firm's business is shaping up for a possible public offering before the end of the year.

Whether the company succeeds in launching an IPO, Transmeta's future financial plans will likely become a major topic of interest in the semiconductor community. The company generated a substantial amount of buzz following the unveiling of its Crusoe family of processors last month. Many in the industry believe that the new chip line could become a legitimate competitor to semiconductor giant Intel in the mobile and Internet device markets.

"It is possible we could do an IPO" this year, he said. Then again, Ditzel cautioned that circumstances could change. Additionally, the company possibly may seek to raise a round of mezzanine financing in the second half of the year, he added. Mezzanine financing typically occurs right before an IPO.

Notebook computers containing the company's chips will also likely be on shelves by the end of the year, he added, while Internet devices containing its Crusoe processor will be out earlier.

The Crusoe processors, which will begin to appear in the second quarter, will be able to run the same software as Intel's Celeron and Pentium III processors, but consume far less power.

Power consumption has always been the Achilles' heel for Intel's mobile chips. With chips that consume less power, manufacturers will be able to build smaller, less expensive machines. Fans and heat sinks that help control heat dispersion in devices add weight and expense to traditional notebooks, Ditzel said.

Among other improvements, devices using this technology will be able to run off batteries for much longer periods of time. Crusoe processors use far less power because they contain far fewer transistors.

"The software itself becomes an integral definition of what a processor is," Ditzel said. Fewer transistors also keep processor manufacturing costs lower, a recurring and significant problem for Intel competitors.

"The fundamental issue that contributes to manufacturing cost is die size," he said. Die refers to the size of the silicon.

Internet devices containing the Crusoe 3120 chip should start beginning to appear by the second quarter, he said. Diamond Multimedia has already announced it will incorporate the chip into an upcoming Web pad-like device.

Notebooks using Transmeta's more powerful 5400 processor should begin to appear by the end of the year, said Ditzel.

Quanta, a large Taiwanese company that manufacturers notebooks for U.S. companies, and Uniwell will adopt the chip, he said.