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Transmeta selects TSMC for next-gen CPUs

Second source becoming primary supplier?

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Transmeta will turn to the Taiwan Semiconductor Manufacturing Company (TSMC) to produce its upcoming Crusoe TM5500 and TM5800 processors.

No wonder some observers have suggested a parting of the ways with IBM may be in the offing, especially since Big Blue sold 600,000 Transmeta shares this week just ahead of the pummelling Wall Street gave the chip designers shares in the wake of its sales warning.

IBM made $7.2 million on the deal, valuing the shares at $12 a pop. After Transmeta's warning, its stock closed at $5.36 yesterday.

Transmeta signed up TSMC earlier this year, ending its exclusive deal with IBM. At the time, TSMC was described as a second source, but the decision to use the foundry for the 5500 and 5800 suggests TSMC might have supplanted IBM as primary source.

Transmeta the decision was motivated by more pragmatic considerations. "It is a matter of factors coming together. We looked at the timing, capacity, pricing and geographic diversity," said a Transmeta spokesman, cited by EBN.

However, there's no reason why those same factors should favour TSMC again, in future. ®

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