transmeta

Intel settles Transmeta patent battle
Coughs up $250m in total

Matt Chapman, vnunet.com 24 Oct 2007

ADVERTISEMENTIntel has settled its patent dispute case with Transmeta and will pay $250m (￡122m) to the rival chip maker.

Transmeta filed the lawsuit against Intel in October 2006, accusing the chip giant of infringing on 10 patents covering computer architecture and power efficiency technologies.

Transmeta alleged that Intel infringed on its intellectual property in the Pentium III, Pentium 4, Pentium M, Core and Core 2 product lines.

Intel countersued Transmeta in January 2007, accusing the smaller company of infringing seven Intel patents.

The deal agreed today will see Intel pay an initial $150m payment to Transmeta, plus an annual licence fee of $20m over the next five years.

As part of the agreement, both parties have dismissed their pending litigation.

"We are very pleased to have reached this agreement with Intel," said Les Crudele, president and CEO of Transmeta.

"We believe that this arrangement will create value for Transmeta stockholders both by realising immediate financial value for our intellectual property rights and by supporting our technology development and licensing business going forward."

AMD invested $7.5m in Transmeta in July 2007 and the company once employed Linux creator Linus Torvalds.

See also:

Transmeta (NASDAQ: TMTA) is a company that develops computing technologies with a focus on reducing power consumption in electronic devices. It was founded in 1995 by Bob Cmelik, Dave Ditzel [1], Colin Hunter, Ed Kelly, Doug Laird, Malcolm Wing, and Greg Zyner as a US-based corporation that designed very long instruction word code morphing (Microcoded) microprocessors. So far, it has produced two x86-compatible CPU architectures: Crusoe and Efficeon. These CPUs have appeared in ultra-portable laptops, blade servers, tablet PCs, a personal cluster computer, and a silent desktop, where low power consumption and heat dissipation are of primary importance.

Contents
1 History
2 Timeline
2.1 Origins as a stealth startup
2.2 Lawsuit against Intel Corporation
3 Technology
3.1 Viability
4 Trivia
5 References
6 External links



[edit] History
Throughout Transmeta's first few years, little was known about exactly what it would be offering. Its web site went online in mid-1997, and for approximately two and a half years displayed nothing but the text "This web page is not yet here." Information gradually came out of the company, suggesting of a very long instruction word-based (VLIW) design that translated x86 code into its own native code. As Intel's then-forthcoming "Merced" processor was also a VLIW design which could translate x86 code, speculation arose suggesting that Transmeta's product could have supercomputer-level processing power while actually being cheaper to manufacture than any offering by Intel, AMD or Cyrix.[citation needed]

In fact, Transmeta marketed their microprocessor technology as extraordinarily innovative and revolutionary in the low-power market segment. They had hoped to be both power and performance leaders in the x86 space. But initial reviews of the Crusoe indicated the performance fell significantly short of projections. [2] Also, during Crusoe development Intel and AMD significantly ramped up speeds and began to address increasing concerns about power consumption. So Crusoe was rapidly cornered into a low-volume, small form factor (SFF), low-power segment of the market.

In response, Transmeta quickly re-designed its technology, and produced the Efficeon processor. The Efficeon claimed to have twice the performance of the original Crusoe CPU at the same frequency. But the performance was still weak relative to the competition, and the complexity of the chip had increased significantly. This greater size and power consumption may have diluted a key market advantage Transmeta's chips had previously enjoyed over the competition.

Transmeta has employed a number of industry luminaries such as Linus Torvalds and Dave D. Taylor. Initially, its purpose was kept secret, but partially because it had such talent amongst its staff, the industry was constantly abuzz with rumors in addition to 'conspiracy theories' resulting in excellent press relations (PR).

Torvalds left Transmeta in June 2003 to dedicate himself to the further development of the Linux kernel.

As an example of technology media hype, the company was once named as the Most important company in Silicon Valley in an Upside magazine editorial. Less well reported was that the company was never profitable while it was a chip vendor. In 2002, it had a loss of $114 million dollars, in 2003 a loss of $88 million, in 2004 a loss of $107 million.

As of January 2005 the company announced a strategic restructuring away from being a chip product company to an intellectual property company. That is, instead of selling chips, it will sell technology for use by other chip makers. In February 2005, there was wild speculation that AMD might buy Transmeta. In March 2005 Transmeta announced that it was laying off 68 people, leaving 208 employees. About half of the remaining employees were to work on propagating the LongRun2 power optimization technology within Sony products. Sony was reported to be a key licensee of this Transmeta technology.


[edit] Timeline
Founded in 1995.
Corporate launch on January 19, 2000. [3]
On November 13, 2000, Transmeta announces their initial public offering at $21/share. Stock skyrocketed to $46/share making it the last of the great high tech IPOs of the bubble not surpassed by a high tech company again until Google's IPO in 2004.
In July of 2002, Transmeta experience first set of layoffs equaling 40% of the company. [4]
On May 31, 2005, Transmeta announced the signing of asset purchase and license agreements with Hong Kong's Culture.com Technology Limited led by Chu Bong-Foo, the inventor of the Cangjie method and one of the founding fathers of modern Chinese computing. However, due to delays in obtaining the necessary technology export licenses from the US Department of Commerce, the parties announced the termination of this agreement on February 9, 2006.
On August 10, 2005, Transmeta announced its first ever profitable quarter. On March 20, 2006, GameSpot reported that Transmeta is working on an "unnamed" Microsoft project, probably the Origami.
[2]

On October 11, 2006, Transmeta announced that it had filed a lawsuit against Intel Corporation for the infringement on ten of Transmeta's US patents. The lawsuit, filed with the US District Court of Delaware, requested an injuction against Intel's continuing sales of infringing products and also requested monetary compensation for damages.
On February 7, 2007, Transmeta closed its engineering services departments and terminated 75 employees. The company announced that it would no longer develop and sell hardware, but would focus on the development and licensing of intellectual property. [5]
On July 6, 2007, AMD invested $7.5 million in Transmeta. AMD plans to use Transmeta's patent portfolio related to energy-efficient technologies. [6]

[edit] Origins as a stealth startup
The company began as a stealth startup. Transmeta attempted to staff the company in secret, although speculation online was not uncommon [7]. One source of speculation was the company's bare-bones webpage. On November 12, 1999, a cryptic comment in the HTML appeared [8]:

Yes, there is a secret message, and this is it: Transmeta's policy has been to remain silent about its plans until it had something to demonstrate to the world. On January 19th, 2000, Transmeta is going to announce and demonstrate what Crusoe processors can do. Simultaneously, all of the details will go up on this Web site for everyone on the Internet to see. Crusoe will be cool hardware and software for mobile applications. Crusoe will be unconventional, which is why we wanted to let you know in advance to come look at the entire Web site in January, so that you can get the full story and have access to all of the real details as soon as they are available.

The company was largely successful in hiding its ambitions until the official announcement. Over 2000 non-disclosure agreements (NDAs) were signed during the stealth period [9].


[edit] Lawsuit against Intel Corporation
On October 11, 2006, Transmeta announced that they have filed a lawsuit against Intel Corporation for infringement of ten Transmeta U.S. patents covering computer architecture and power efficiency technologies.

The complaint charges that Intel has infringed and is infringing Transmeta's patents by making and selling a variety of microprocessor products including at least Intel's Pentium III, Pentium 4, Pentium M, Core and Core 2 product line.


[edit] Technology
The actual Transmeta processors are in-order very long instruction word (VLIW) cores. To execute x86 code, a pure software-based instruction translator dynamically compiles or emulates x86 code sequences, using execution-hotspot guided heuristics. While similar technologies existed (WABI for Sun, FX!32 for Alpha and IA-32 EL for Itanium) in the 1990s, the Transmeta approach has set a much higher bar for compatibility―able to execute all x86 instructions from initial boot up to the latest multimedia instructions―while retaining most of its core performance.

Transmeta claims several technical benefits to this approach:

As the market leaders Intel and/or AMD would extend the core x86 instruction set, Transmeta could quickly upgrade their product with a software upgrade rather than requiring a respin of their hardware.
Performance and power can be tuned in software to meet market needs
It would be relatively simple to fix hardware design or manufacturing flaws in the hardware using software workarounds.
More time could be spent concentrating on enhancing the capabilities of the core or reducing its power consumption without worrying about 16 years of backward compatibility to the x86 architecture.
The processor could emulate multiple other architectures, possibly even at the same time. (At its initial Crusoe launch, Transmeta demonstrated pico-Java and x86 running intermixed on the native hardware.)
Prior to Crusoe release, rumors indicated Transmeta was relying on these benefits to develop a hybrid PowerPC and x86 processor. But Transmeta would initially concentrate solely on the extremely low-power x86 market.

The ability to quickly update products without a hardware respin was demonstrated in 2002 with an in-the-field upgrade (a download) to enhance CPU performance of the Crusoe based HP Compaq TC1000 tablet PC. It was used again in 2004 when NX bit and SSE3 support were added to the Efficeon product line without requiring hardware changes. In the field upgrades were rare in practice due to system hardware vendors not wanting to incur additional customer support costs or spend additional money on QA for the potential upgrades or bug fixes to shipped products they had already closed the revenue books on.


[edit] Viability
Transmeta lost much credibility and endured significant criticism due to the poor initial Crusoe showing with large discrepancies between projections and actuals for both performance and power. Although power consumption was somewhat better than Intel and AMD offerings, the end user experience (i.e. battery life) only showed a marginal overall improvement. [3] First, the Code Morphing Software (CMS) combined with cache architecture artificially inflated comparisons between benchmarks and real-world applications. This is due to the repetitive nature of benchmarks and their small footprints. The CMS software overhead may have actually been a key cause of much lower performance for many real-world applications; the simple VLIW core architecture could not compete on computationally-intensive applications; and the southbridge interface was limited by its low bandwidth for graphics or other I/O-intensive applications. Some standard benchmarks even failed to run, questioning the claim of full x86 compatibility. [4]

The Efficeon processor addressed many of Crusoe's shortcomings and showed roughly a 2x real-world improvement over Crusoe. Its die was considerably smaller than Pentium 4 and Pentium M, when compared in the same process technology. Efficeon's die fabricated in 90 nm is 68 mm2, which is 60% of the Pentium 4 in 90 nm, at 112 mm2, with both processors possessing a 1 MB L2 cache.

The notion of selling a product into a specific thermal envelope was typically not understood by the mass of reviewers, who tended to compare Efficeon to the gamut of x86 microprocessors, regardless of power consumption or application. One such example of this criticism suggests the performance still significantly lagged Intel's Pentium M (Banias) and AMD's Mobile Athlon XP. [5]

For the 7 to 12 Watt thermal envelope in which Efficeon was designed to compete, there are unsubstantiated claims that its frequency far exceeded anything else in the market, at 1.5 GHz and 7 W, while the Centrino at the time could only operate within the 7 W envelope when its frequency was reduced to 1.1 GHz. This claim also admittedly considers only CPU frequency and ignores other significant factors in overall performance, such as core cycles per instruction (CPI), or memory performance and bandwidth, which have varying impact on different benchmarks and system configurations.

Unfortunately for Transmeta, other components within a laptop computer also consume power, such as the LCD display and hard disk drive. Since laptops with Transmeta CPUs share these components with regular laptops, the net increase in battery life was not large enough to make much difference to customers.


[edit] Trivia




Seemingly left for dead by investors, chipmaker Transmeta revived on Wednesday after settling a patent dispute with Intel that will give it a massive cash infusion.

Shares of Transmeta (nasdaq: TMTA - news - people ) jumped 254.1%, or $10.82, to $15.00, after the company agreed to settle its dispute with Intel (nasdaq: INTC - news - people ). As part of the agreement, Intel will make Transmeta an initial payment of $150 million. It will also pay Transmeta an annual license fee of $20 million for each of the next five years.

In return, Transmeta will license Intel all of its patents and patent applications forever. The license is nonexclusive so Transmeta can still offer its technology to other companies.

The settlement is a huge windfall for tiny-cap Transmeta. The $250 million in payments is nearly six times Transmeta's Tuesday market value of $41.8 million.

It provides the struggling company with much-needed cash. According to Thomson Financial, Transmeta has posted losses for six of its last seven quarters.

Transmeta stirred excitement with investors when it went public in 2000. At the time, the company's cutting-edge microprocessors consumed relatively little power and won a following with laptop makers looking to extend battery life.

But those auspicious beginnings turned into a string of retreats. Brutal competition from Intel and production problems forced the company out of the business of making and selling microprocessors. In April of this year, Transmeta fired 75 employees as it eliminated its engineering services business. (See: "Transmeta To Cut More Jobs")

The settlement payments are a drop in the buck for Intel. During its most recent quarter Intel's sales totaled $10.1 billion and its net income was $1.9 billion. Shares of Intel were down 82 cents, or 3.1%, to $25.98, on Wednesday, as part of widespread dive among tech stocks after Broadcom (nasdaq: BRCM - news - people ) announced significantly-weaker-than-expected third-quarter results.