IBM cancels plans to use Transmeta chip

NEW YORK: Computer giant IBM Corp cancelled plans to use a chip made by

Transmeta Corp in a Thinkpad laptop computer that was to come out later this

year, the Wall Street Journal said in its electronic edition on Thursday.

The decision came just days before Transmeta expects to offer shares to the

public.

Armonk, NY-based International Business Machines Corp declined to give a

reason for its decision to back away from using Transmeta's Crusoe processor,

the paper said.

US microprocessor startup Transmeta also declined to comment, citing its

regulatory "quiet period", the paper added.

IBM said it was still evaluating Transmeta's processors for future use in

other products, the paper said. IBM manufactures Transmeta chips as part of an

unrelated manufacturing agreement, the report said.

Last month, Transmeta said it planned to offer 13 million common shares to

investors in the range of $11-$13 per share, potentially netting the company

about $144 million in proceeds.

Transmeta burst into the limelight in January when it unveiled its Crusoe

chip which uses software to perform many functions previously done by hardware,

enabling lighter PC notebooks with much longer battery life.

(C) Reuters Limited 2000.