Reliable sources in Silicon Valley said early today that IBM Microelectronics is to take up some of the slack in its fabs caused by the loss of Cyrix business by building chips for Transmeta. The fabless valley start-up creates alternative VLSI chips for the multimedia market. Perhaps more significantly, Linus Torvalds, the designer of the now famous Linux OS, also works for Transmeta. The sources said that the chips produced by the company will use state-of-the-art silicon facilities at IBM Micro fabs. In July, the company, which is based at 3940 Freedom Circle in Santa Clara (phone number: 408 327-9830) and which has a mysterious web page which says nothing, was attempting to hire engineers to perform kernel development, create compilers, perform compatibility testing, and work on 3D graphics and verification. It has already poached staff from several leading universities, including Bill Rodriguez, on permanent loan from Project MAC at the MIT AI Lab, and Stephen Herrod, who worked on the Flash project at Stanford, partly funded by MIPS. The startup is headed by CEO David Ditzel, who formerly worked at Sun on its SPARC microprocessors. It is a member of the AGP forum and the American Electronics Association, but otherwise is highly secretive about its work. Ditzel was an early proponent of Risc architecture. The company, a fabless design firm, rather like Cyrix when it was formed, has some venture funding from Paul Allen, co-founder of Microsoft. No-one from IBM Micro was available for comment. ® Click here for more stories