SANTA CLARA, Calif.-- Despite a series of high-profile design wins in recent weeks, microprocessor supplier Transmeta Corp. today had bad news for investors. The startup said it was cutting its outlook and lowering revenue estimates for the current quarter by 40-to-45% due to weak demand for processors in portable computer systems.
"Our business is presently based primarily in Japan, which now appears to be experiencing the economic weakness that affected other parts of the world earlier this year," said Mark K. Allen, president and CEO of Transmeta. "Accordingly, we are decreasing our revenue expectation for the second quarter of 2001 by 40-45%, compared with our revenue of $18.6 million for the first quarter of 2001."
Transmeta has announced major design wins for its Crusoe processor in notebook computers made by Toshiba, Sharp, and RLX. Last month, the Santa Clara company also announced it was licensing 64-bit x86 microprocessor technology from Advanced Micro Devices Inc. in a move to increase competition with Intel Corp. (see May 25 story).
In the first quarter of 2001, Transmeta posted a net loss of $22.7 million on sales of $18.6 million, compared to a net loss of $20.0 million on nearly no revenues in Q1 last year, prior to the company's shipment of products.
But now, Transmeta is feeling the pinch of the current semiconductor downturn. "In conjunction with this projected revenue decrease and our planned transition to a new manufacturing process for the second half of 2001 using 0.13 micron technology, we are also analyzing our inventory levels of existing products and expect that we will take an inventory charge during the second quarter," Allen said.
