NEC licenses Transmeta technology, takes stake in company

Sunnyvale (CA) - NEC will use Transmeta's power saving technology LongRun2 across its product lines, the firm announced Thursday. NEC also acquired nearly two percent of Transmeta common stock as part of an offering last December.

Transmeta has received a significant endorsement of its LongRun2 feature from NEC. The Japanese company has licensed the technology and will integrate it across its product lines of personal computing, mobile and consumer electronics, the companies said on Thursday. Transmeta markets LongRun2 especially as a "practical solution of leakage power' in computer chips. The license covers 90nm, 60nm and 45nm chips.

Exact terms of the deal were not disclosed, but the Tokyo-based company agreed to pay licensing fee and royalties to Transmeta. NEC also took an equity stake in Transmeta as part of a 25 million-share common stock offering last December. The value of the investment is estimated at approximately 2.8 million shares or $8 million.

Transmeta believes that the company will benefit in a variety of ways from the partnership with NEC. "This strategic alliance will strengthen our own technology", said Arthur Swift, Senior Vice President of Transmeta in an interview with Tom's Hardware Guide. According to the executive, the deal with a "powerhouse company" will provide "credence" to the LongRun2 technology.

What could turn out as a major trend for Transmeta, the licensing strategy certainly opens new income possibilities and diversifies the firm's revenue base. "This is the first license deal we have disclosed. We have seen considerable of interest from other companies," Swift said. Future deals could be on the horizon, Swift however declined to commend on details. But the company would be interested to go even beyond LongRun2 and license other intellectual property "on a case by case basis".

Transmeta did not offer details about financial impacts of the agreement. "Obviously, it is a positive development for Transmeta," Swift said. The Sunnyvale-based chip-developer puts high hopes in the alliance: "NEC is a company with $6 billion in yearly revenues and intends to deploy our technology on a broad basis."