Transmeta investigating Taiwan foundries

The chip startup taking on Intel may be getting into a whole new ballgame with factories-for-hire

Transmeta is testing the water with Taiwan-based manufacturing plants, in a move that could eventually boost the chip startup's capacity to manufacture its Intel-compatible chips for the featherweight laptop market.

Several Taiwanese chip foundries have produced proof-of-concept chips based on Transmeta's designs, according to the company. Among them is Taiwan Semiconductor Manufacturing Company (TSMC), the largest of the independent semiconductor foundries-for-hire, and United Microelectronics (UMC), another major foundry.

"Several foundries in Taiwan have produced samples for Transmeta," said a Transmeta spokeswoman. "But Transmeta is not sampling to customers through those foundries. That indicates a level of commitment that hasn't been reached yet."

Foundries such as TSMC and UMC produce chips for other companies who own or license the chip designs. Unlike chip behemoths like Intel or Advanced Micro Devices (AMD), they are extremely flexible, able to manufacture everything from embedded chips to chipsets to full-on processors.

The move to Taiwan could be the next stage of Transmeta's development as it seeks to license its Crusoe processor for laptops, Web pads and other power-sensitive, x86-compatible devices, say analysts.

Some of the most successful intellectual property-based chip companies -- the model Transmeta is following -- make not PC chips, but the embedded processors used in devices such as PDAs and mobile phones. The processor designs of UK-based ARM (formerly Advanced RISC Machines), for example, are used by Intel, Lucent, Samsung, Sony and others. They have even made their way into next-generation applications such as 3G wireless chips and Bluetooth networking processors.

"ARM has played it beautifully," said analyst Mat Hanrahan with Bloor Research. "The money it's made itself, and the extent of the licences ARM is in now,... are due to TSMC and other foundries. You only need one fab [factory] on your side, and TSMC has eleven."

In July TSMC merged with Acer Manufacturing Company and World-wide Semiconductor Manufacturing Company, boosting its manufacturing power.

A deal with TSMC or a similar foundry could help Transmeta to reach ARM-like levels of ubiquity, industry analysts said. However it could also open up Transmeta to the same lawsuits that have hit Intel-compatible manufacturers such as Via Technologies. In July Via agreed to pay Intel licence fees after a long-running patent dispute.

IBM, Transmeta's only current licensed chip manufacturer, is considerably more expensive than foundries such as TSMC.

Such licence fees, covering key aspects of x86 technology, could raise the price of Transmeta-based products. Those products will probably already demand a retail premium because of the licensing fees that must be paid to IBM and Transmeta.

The PC vendors who have announced their intention to make Transmeta notebooks are Fujitsu, Hitachi, IBM and NEC. IBM will begin manufacturing Transmeta chips in volume this month, and notebooks are to hit the shops by Christmas.

Transmeta is pushing ahead with an ambitious roadmap that will take its processors to the 1GHz mark in 2001, integrate more components onto the chip die, and shift to the 0.13-micron architecture. Intel, AMD and Transmeta all currently to a 0.18-micron specification, and Transmeta could beat its more conventional rivals to the new process.

A tinier architecture means lower manufacturing cost, power consumption and heat production, as well as faster clock speed.

Transmeta's Crusoe TM5600, announced last month, will increase the on-chip L2 memory to 512k, double that of the TM5400 announced in February. TM5600 will run five to 15 percent faster than the TM5400 and consume two to 17 percent less power. Transmeta says the chip uses less power, despite the faster speed, because it makes fewer accesses to main memory over the I/O bus.

Transmeta will move its cores to IBM's 0.13-micron manufacturing process in the second half of next year, which will automatically reduce core voltage to 1.2V and boost clock speeds about 25 percent. All Transmeta's chips are manufactured using copper interconnects, a pioneering material that replaces today's standard aluminium.

AMD manufactures some of its Thunderbird Athlon processors using copper, but Intel does not yet use copper.

In 2002 Transmeta will revamp Crusoe with a new core based on VLIW (Very Long Instruction Word), a CPU architecture that reads a group (or word) of instructions and executes them at the same time. This new core will allow Crusoe to move to the 0.10-micron specification, according to Transmeta.

Transmeta's chip emulates much of the x86 architecture in software, (a process it calls code morphing) which the company claims allows its chips to run at about one watt. That means a typical laptop battery could last six or eight hours, rather than one or two. However, the power usage statistics have not yet been independently verified.

See Chips Central for daily hardware news, including an interactive timeline of AMD and Intel's upcoming product launches.

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