Monday, 9 July 2007

AMD Invests in Transmeta, To Rival Intel

There goes a saying that enemy’s enemy is a friend and the same holds good for AMD and Transmeta. AMD, the world’s second biggest computer chip maker has picked up a stake in Transmeta by investing USD 7.5 million. Transmeta develops and licenses computing, microprocessor and semiconductor technologies and related intellectual property.

Both AMD and Transmeta have been badly battered by the increasing market share and clout of Intel and the investment by AMD in Transmeta is a response to that. In exchange for its cash, AMD will receive preferred Transmeta stock. According to Dirk Meyer, AMD Chief Operating Officer, the investment is meant to compliment his company's energy-efficient technologies while giving Transmeta some development aid.

Transmeta was a darling of the Silicon Valley in the late 90s and early 2000, churning out chips after chips that rivaled Intel at the low end. While working in stealth mode, it attracted a lot of venture capital funding and a battery of smart employees. It launched a series of low power processor as an alternative to Intel’s products and a challenge to push it down from its perch. However, Intel, with its massive financial and engineering clout played Transmeta down. It not only launched better products but cheaper too and this forced Transmeta into irrelevance.