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Transmeta confirms recall of Crusoe chips

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CIOL Bureau
New Update

SAN FRANCISCO: Transmeta Corp. confirmed on Wednesday that it is working with

Japanese computer maker NEC Corp. to recall notebook computers built with flawed

versions of its power-saving Crusoe microprocessor.

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Transmeta said in a statement that the recall would take in "fewer than

300" NEC computers at risk of failing if the user reinstalled operating

software.

The company said that the recalled Crusoe chips came from a limited

manufacturing batch, and the remaining inventory of the defective chips had been

returned to Transmeta.

Shares of Transmeta tumbled 15 per cent to close at $23-13/16 on Nasdaq on

Wednesday after a Japanese newspaper reported that NEC was considering a recall.

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In after-hours trade, Transmeta shares extended that slide, taking the

cumulative loss on the day to nearly 25 per cent. The shares last traded on

Instinet at $21.

The stock had surged to $50 on its first day of trading following its highly

anticipated $273 million initial public offering on Nov. 7.

The Crusoe chip, the first designed by Transmeta, uses elaborate software

instructions rather than hardware to perform certain functions, cutting power

consumption.

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"Transmeta stands behind the Crusoe and will continue to work with its

customers to insure Crusoe's quality and reliability," the company

statement said.

Sony Corp., which uses the same Crusoe chip in its notebook PC, has also

reportedly started a probe, according to Japan's Yomiuri Shimbun.

Neither Sony nor Transmeta could be reached immediately for comment.

Rival Intel Corp. already has chips on the market that consume about the same

amount of power - roughly 1 watt - as the Transmeta chip, which is aimed at

mobile computing and other wireless, handheld devices requiring long battery

life.

(C) Reuters Limited 2000.

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