Transmeta Corporation Streamlines Operations to Focus on Core Business of IP Licensing

Update: Intellectual Ventures has acquired Transmeta Patent Portfolio on Jan. 28, 2009

Actions Expected to Result in $17M to $23M in Annualized Savings

SANTA CLARA, California (February 5, 2007) − Transmeta Corporation (NASDAQ: TMTA) today announced that the company is streamlining its operations to focus on its core business of developing and licensing intellectual property. "Transmeta has a long history of pioneering innovative technologies that have resulted in a very strong intellectual property portfolio," said Lester Crudele, president and CEO. "After a critical evaluation of all our lines of businesses, we have decided that IP development and licensing will be our core business activity going forward. We continue to believe that this is the best way for us to deliver our technology to the market and monetize our investments. Therefore, we have initiated a restructuring plan to re-align our headcount and expenses accordingly."

On Friday, February 2, 2007, Transmeta began the initial phase of its re-alignment by decreasing its worldwide workforce by approximately 39 percent, or 75 employees, most of whom worked in the Company's engineering services business. The Company also took the initial steps to close its sales and support offices in Taiwan and Japan. Over the next two quarters, as the company completes its existing engineering services work, the company expects to further reduce its headcount by about 25 to 55 people, depending on the level of support required for the Microsoft FlexGo program.

The Company estimates that these actions will result in cumulative restructuring charges in the range of $11 million to $14 million, the vast majority of which will be an expense in the first quarter of 2007. The Company estimates these actions will require total cash expenditures of about $7 million to $10 million, which will be incurred primarily in the first quarter. The Company expects these actions to generate cost savings in the range of $17 million to $23 million on an annualized basis.

Conference Call

The company will hold a conference call at 8:00 a.m. Eastern time (ET) / 5:00 a.m. Pacific time (PT) today, February 5, 2007 to discuss this announcement. To listen to the conference call, please dial (913) 312-1297. The conference call will also be available to the public live over the Internet at the investor relations section of Transmeta's website at www.transmeta.com. A recording of the conference call will be available for one week, starting one hour after the completion of the call, until February 12, 2007. The phone number to access the recording is (888) 203-1112, and the passcode is 1172402. For callers outside the U.S., please dial (719) 457-0820, with the same passcode.

About Transmeta Corporation

Transmeta Corporation develops and licenses innovative computing, microprocessor and semiconductor technologies and related intellectual property. Founded in 1995, we first became known for designing, developing and selling our highly efficient x86-compatible software-based microprocessors, which deliver a balance of low power consumption, high performance, low cost and small size suited for diverse computing platforms. We now also provide, through strategic alliances and under contract, engineering services that leverage our microprocessor design and development capabilities. In addition to our microprocessor product and services businesses, we also develop and license advanced power management technologies for controlling leakage and increasing power efficiency in semiconductor and computing devices. To learn more about Transmeta, visit www.transmeta.com.