NEC Electronics Corp. has licensed Transmeta Corp.’s LongRun2 power management software for use in the Japanese company’s upcoming semiconductor products. The two companies will announce the agreement on Thursday during a press event in Tokyo.

With the deal, NEC Electronics, a publicly-held company that was spun out of consumer electronics giant NEC Corp. in November 2002, will pay Transmeta an undisclosed licensing fee as well as royalties for the right to incorporate LongRun2 into its semiconductors, Application Specific Integrated Circuits (ASICs ), microcontrollers and LCD controllers, said Art Swift, Transmeta’s senior vice president of marketing. “We’ll probably see products from them in 2005,” he said.

The software will be particularly useful in low-power devices such as mobile handsets, broadband communications devices and mobile computers, Swift said.

LongRun2 is designed to reduce the amount of power that inadvertently slips out of the wires and gates of microprocessors, a phenomenon called “leakage.” It is the next generation of the LongRun software that Transmeta developed to manage the power consumption of its Crusoe processors, introduced in January 2000. Transmeta expects to begin shipping versions of its own Efficeon processors with the LongRun2 software in the second half of this year.

As companies such as NEC begin building smaller components, the leakage problem will become more pronounced and will eventually slow down the rate at which electronic devices can be improved, Swift said. “These looming power leakage issues actually have the potential to derail the continuous improvements that we have made in the industry over the last decades,” he said.

The NEC Electronics deal is the first licensing arrangement Transmeta has struck for its LongRun2 technology, and it is an important endorsement of the Santa Clara, California, company’s approach to solving the leakage problem, said Tim Bajarin, the president of the research company Creative Strategies Inc.

“From Transmeta’s standpoint, adding any new company to their portfolio of clients is important, but NEC is also a major powerhouse in Japan,” he said. “From that standpoint, it’s clearly very good news for Transmeta.”

NEC Electronics has also purchased an equity stake of just under two per cent of the outstanding shares in Transmeta, Swift said. The investment, which was made in December 2003, was “intended to cement the relationship between the two companies,” he said.

A spokesman for NEC Electronics declined to comment on the announcement.



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