Transmeta Corporation Expands Target Markets with New Crusoe SE

Santa Clara, Calif; January 6, 2003...Transmeta Corporation (Nasdaq: TMTA) today announced new energy efficient Crusoe™ Special Embedded (SE) processors targeting a wide range of x86 embedded applications, including industrial automation, scientific instrumentation, retail kiosks, point-of-sale terminals, automotive infotainment, process control and home automation systems. Transmeta also announced an Embedded Partners Program for leading BIOS/firmware companies, embedded operating system companies and silicon component suppliers committed to supporting customers developing efficient embedded designs based on Crusoe SE processors.

Crusoe SE processors meet the growing requirement for combining x86-compatibility, high performance, power efficiency, low heat dissipation and chipset integration to create compact, passively cooled embedded systems. Crusoe SE processors use LongRun, an advanced power management technology, to dynamically optimize processor frequency and voltage while monitoring chip temperature, keeping power use and heat at minimum levels. Embedded system developers can now take advantage of almost 1GHz of x86-compatible performance, with an integrated Northbridge, in a small package that does not require a cooling fan. The Crusoe SE product family is an exceptional solution for developers of today's high performance, x86 embedded systems and an excellent performance upgrade path for systems developed using lower-end SOC embedded technology.

Crusoe SE processors are designed and tested for long-term use in harsh environments, where a chip's temperature can reach as high as 100° C. Future versions of Crusoe SE processors will be available for extreme embedded applications that require even wider temperature ranges.

"The introduction of Crusoe SE processors for x86 embedded applications complements Transmeta's existing mobile business and meets two important company goals," said Dr. Matthew R. Perry, president and CEO, Transmeta Corporation. "We are expanding target markets for Crusoe processors to new growth segments and geographic regions."

Crusoe SE processor specifications include:

• Crusoe SE parts available at 667 MHz, 800 MHz and 933 MHz, optimized for x86 embedded applications.
• Each processor available in a standard or low power version.
• Reduced operating temperatures enabling fanless system designs to minimize end product reliability challenges associated with fan-cooled systems.
• LongRun power and thermal management maximizes embedded system performance while reducing power consumption and heat dissipation.
• Upgraded Code Morphing Software (CMS) enhanced to maximize real-time performance while maintaining complete x86-compatibility.
• Integrated Northbridge reduces board space use allowing compact designs.
• Reliable operation twenty-four hours a day, seven days a week at full-rated speed and temperature to meet the high reliability requirements of mission critical embedded designs.
• Extended Crusoe SE availability program to support long-term embedded product life cycles.
• Crusoe SE processors immediately available to customers.
• Pricing example: 667 MHz Crusoe SE less than $50 per unit in volume.

Transmeta's Embedded Partners Program
Embedded system developers face challenging business and technical requirements, as product operation and reliability specifications are complex and life cycles can last for many years. In addition to a dependable, long-term supply of strategic components such as Crusoe SE processors, these customers require a reliable structure of complementary companies to support a multitude of embedded system needs.

To that end, Transmeta is working closely with many partners to provide essential support services and products that benefit customers in the development of embedded applications. These include BIOS/firmware companies, embedded operating system companies and silicon component suppliers. Through these partnerships, customers have available a wide platform of hardware and software that are pre-tested for use with Crusoe SE processors for easy development and fast time-to-market.

Transmeta is preparing a comprehensive section of its Web site to serve the needs of embedded customers. The section is scheduled to be live later this week at www.transmeta.com.

BIOS/Firmware Companies
Crusoe SE processors' x86 compatibility means easy integration with the already established base of x86 BIOS software. Transmeta is collaborating with several leading embedded BIOS companies to offer attractive feature sets that are optimized for embedded applications, in addition to those in the traditional PC market. Transmeta's BIOS company partners include:

General Software, Inc.
General Software provides superior enabling firmware and world-class support for OEM manufacturers of telecommunications, data communications, consumer electronics, dedicated servers and other specialized computing devices.

"General Software's support for the Transmeta's Crusoe embedded processors means breakthrough technology for the x86 embedded market and an attractive solution for Transmeta customers," stated Dick Dorton, business development manager, General Software, Inc.

Insyde Software
Insyde Software offers a full line of embedded ROM firmware, Windows CE, Microsoft XP Embedded and Linux enabling software, power management solutions, USB support, and system integration services.

"Insyde Software is pleased to be working with Transmeta to provide a complete hardware and software enabling solution in support of the newly announced Crusoe SE processors," said Stephen Gentile, vice president of business development and marketing, Insyde Software. "By leveraging our respective embedded design expertise, we can deliver a high performance, differentiated solution to consumer electronics, information appliance, and thin-client/POS manufacturers."

Phoenix Technologies
Phoenix Technologies delivers an industry-leading BIOS solution for mobile applications that has often been chosen by Transmeta's customers for notebooks and other power sensitive systems. As Transmeta launches its new Crusoe SE processors for embedded markets, Phoenix and Transmeta strengthen their commitment to deliver world-class solutions by combining their respective technologies across a wide range of customer products. In addition to its traditional BIOS product, Phoenix is offering a new core-managed environment, FirstView Connect, which enables delivery of open Internet-standards content via set-top boxes, Web terminals, information kiosks, portable video recorders (PVRs), enhanced DVD players and media players.

"With FirstView Connect, Phoenix provides instant Internet connectivity at the core of devices that enable new forms of entertainment, e-commerce and information on demand," said Bob Gager, senior director of product marketing for Phoenix. "The new Crusoe SE processors are a perfect fit for our software solution, offering an unmatched combination of performance, cool-operation and energy efficiency to this exciting category."

Embedded Operating System Companies
The complete x86 compatibility and reduced power requirements of Crusoe SE processors enable embedded operating system companies to expand sales into new areas of the market. Transmeta has established close working relationships with market leaders across the embedded operating system space, offering easy out-of-the-box bring-up of multiple offerings. These partners include:

LynuxWorks
LynuxWorks is a leader in the embedded software market, providing operating systems, software development products and consulting services for the world's most successful communications, aerospace/defense, and consumer products companies.

"Transmeta's Crusoe processors provide a very unique solution to the historical challenge of achieving high processor performance within a useable, embedded power budget," said Art Lee, director of business development, LynuxWorks. "Combining this high performance, power efficient technology with our choice of Linux compatible, embedded operating systems, creates an ideal platform for a wide range of end market applications."

Microsoft Corporation
Microsoft Corporation certified Transmeta's existing Crusoe processors for the Windows CE .NET operating system, allowing new opportunities for Transmeta in mobile and embedded markets. Windows CE .NET is Microsoft's modular, small footprint, embedded operating system for a variety of computing devices such as PDAs, digital cameras, printers, scanners, retail point-of-sale terminals and set-top boxes, among many other intelligent computer products.

Transmeta's new energy efficient, high performance, x86-compatible Crusoe SE processors are also designed to take full advantage of Microsoft's Window's XP Embedded operating system. The combination of the powerful Microsoft Windows XP Embedded operating system and high performance Crusoe SE processors allows developers to rapidly design and deploy complex solutions for highly reliable, full-featured embedded applications.

MontaVista Software, Inc.
Montavista Software Inc. provides leading solutions for embedded applications, including MontaVista Linux Professional Edition, named "Best Embedded Linux Solution" at the New York Linux World and Expo. This offering provides Transmeta's customers with a sophisticated, off-the-shelf solution including a rich tool chain, extensive library support, and state of the art networking capabilities. The collaboration between Transmeta and MontaVista Software Inc. will enable customers of both companies to bring Linux-based consumer electronics products to market more quickly and cost-effectively.

"Montavista is committed to help our customers deliver compelling consumer electronics products," said Bill Weinberg, director of strategic marketing, MontaVista Software Inc. "The combination of Montavista's Linux solutions and Transmeta's energy efficient Crusoe embedded processors offer impressive capabilities to the market."

QNX Software Systems
QNX Software Systems is an industry leader in realtime, micro kernel operating system technology. The inherently reliable and scalable QNX® Neutrino®RTOS and powerful QNX® Momentics® development suite together provide the most trusted foundation for embedded systems in the networking, automotive, medical and industrial markets.

"The QNX history of ultra reliability, combined with Transmeta Crusoe's x86 compatibility and efficient power management, is a powerful combination for OEMs building next-generation embedded devices," said Linda Campbell, director of strategic alliances, QNX Software Systems.

Red Hat
Red Hat is recognized as a worldwide market share leader in delivering compelling enterprise-grade Linux solutions. Red Hat develops and supports the Red Hat Linux Advanced Server and Red Hat Linux Advanced Workstation operating systems for deployment in a wide range of markets. For example, Red Hat Linux helps to enable supercomputer-level performance in the Los Alamos National Laboratory's 480-node "Green Machine" compute cluster based on Transmeta's Crusoe processors.

With the rollout of Transmeta's Crusoe SE processors, system designers can now more readily leverage the power of Red Hat's enterprise-grade operating systems with the attractive features of these new processors.

Wind River Systems, Inc.
Wind River Systems, Inc. is the worldwide leader in embedded software and services. It is the only company to provide market-specific embedded platforms that integrate real-time operating systems, development tools and technologies. WIND RIVERÒ PLATFORMS are new, standardized integrated platforms that provide a complete foundation to meet the specific requirements of vertical markets. A VxWorksÒ Board Support Package (BSP) for the Crusoe TM5800 System Development Kit is available from Transmeta's Web.

"Combining Wind River's market-specific integrated embedded platforms with Crusoe's high performance and power efficient operation offers our customers new levels of capability and portability in multimedia devices, industrial control applications, and wireless-networked devices," said Caroline Yao, director of partner solutions for Wind River.

Silicon Component Companies
Silicon component companies are developing new graphics, networking and peripheral components aimed at taking advantage of the reduced power, low-temperature and high performance requirements of the x86 compatible embedded processor market. These Transmeta partners include:

ALi Corporation
ALi Corporation (ALi) is one of the world's leading suppliers of integrated circuits for personal computers and embedded systems. The ALI M1535-family is the most widely chosen southbridge by customers of Transmeta's Crusoe processor to date. The M1535+ generation southbridge shipping in mass production today delivers rich ACPI-compliant power management support, fast I/O using the industry-standard PCI bus, as well as a richly integrated solution that incorporates an advanced full-function Super I/O on-chip, an AC-Link Host controller, two channels of IDE, Fast IR and many other interfaces.

"ALi and Transmeta have long collaborated to deliver attractive notebook solutions to the market and with the launch of Transmeta's Crusoe SE processors, ALi is eager to continue this relationship by offering cutting edge southbridge solutions for embedded customers," said Dr. Chin Wu, president of ALi Corp. "Platform stability is a critical concern in the embedded space, and ALi joins Transmeta's commitment to deliver the M1535+ solution to embedded customers over an extended lifetime."

Silicon Motion, Inc.
Silicon Motion Inc. is a leading provider of high-performance, low-power multimedia accelerators that enable a rich experience on mobile access devices. Combining Crusoe SE processors with Silicon Motion's multimedia accelerator chips provides an ideal solution for embedded mobile market segments such as smart displays, wireless broadband terminals, car information systems, ATMs, point-of-sale systems and kiosks.

"Transmeta and Silicon Motion share the goal of continued expansion and development of energy efficient solutions for the embedded market," said Wallace Kou, president and CEO, Silicon Motion. "Together, our solution provides a compelling platform for the next embedded generation."

Transmeta's Embedded Customers
Transmeta's customers provide innovative, embedded solutions based on the existing family of energy efficient Crusoe processors and several companies have already committed to designs based on the new Crusoe SE processors. Examples of current and new embedded designs include:

Advantech
Advantech is one of the world's largest suppliers of industrial PCs and manufactures PC platforms for communications, industrial automation and embedded computing.

Transmeta and Advantech have collaborated on several embedded products, including a 3.5-inch, single board computer (SBC) based on the Crusoe TM5400 processor. The PCM-9370 fanless SBC simplifies the configuration and installation process because the processor is mounted directly on board. Transmeta's LongRun power management technology allows this product to consume very little power and eliminates the need for a processor fan.

Evalue Technology, Inc.
Evalue Technology, Inc. is an innovator of applied computing solutions, whose mission is to become a leading embedded & IA solution provider.

Evalue's SOM-144 (System-On-Module) product line is a series of complete CPU system modules that can be mounted onto any easily designed application-specific carrier boards. These ready-to-use SOM modules integrate all aspects of PC functionality with a variety of platforms, all within a very small 68 mm x 100 mm area. The ESM-2615 is an ultra small SOM-144 CPU module integrated with most PC functionality and includes an energy efficient, Transmeta Crusoe TM5400 processor.

Gespac
Gespac, a leading European manufacturer of standard form factor and custom embedded boards and systems, will develop a number of embedded products based on Transmeta's new Crusoe SE processor line. The Swiss-based company, which is focused on leading edge embedded systems for the automation, telecommunications, medical and transportation market, will initially develop a series of products aimed at the transportation industry. These Crusoe SE-based products will ship in early 2003.

"The fact that Transmeta's Crusoe embedded processors give our system designers significant x86 processing power with improved reliability due to the elimination of a cooling fan, makes it a natural fit for train-based applications where system up-time is key," said Vincent Gachet, projects manager, Gespac.

IBASE
IBASE, a leader in standard form factor embedded boards, currently offers a wide variety of Crusoe-based boards in a number of form factors. The Taiwan-based company will be expanding its product line of Crusoe-based CPU board products to include the new Crusoe SE processors. IBASE target applications include networking, automation, mini-server, firewall, medical, military and point-of-sale devices.

"The new Crusoe SE processor line gives us the long term product availability that many of our embedded system customers demand," said Ben Liao, vice president of sales, IBASE. "The reduced power requirements coupled with passive cooling enables us to design x-86 compatible, high performance embedded systems with low cost enclosures."

ICP America, Inc.
ICP America offers a comprehensive line of industrial computer products designed to meet the demanding requirements of today's industrial applications, including factory control and automation, computer telephony, medical instrumentation, and mobile computer systems.

The "Suppliers of Innovative Industrial Computer Products," ICP America's extensive product line, includes single board computers, chassis, backplanes, LCD workstations, IDE flash drives and industrial power supplies. The company offers the Crusoe TM5400-based Wafer-6820, a 3.5" single board computer, with fanless operation due to the energy efficient qualities of Crusoe processor technology.

TransDominion Technologies
TransDominion Technologies, which offers a line of Crusoe-based firewall appliances, is a leader in the security appliance industry, specializing in the design, integration, production, and support of customized embedded solutions. The company has partnered with some of the premier vendors in the security industry to help develop embedded appliances based on leading software architectures.

"For the TrueGate TG-23 and TG-27, we needed a processor that could provide high performance and enable an efficient design, a perfect fit for Transmeta's Crusoe processor," said Nate Carmody, chief technology officer, TransDominion Technologies. "The Crusoe processor exceeded our expectations and provided reduced power consumption, making it the best solution for our needs."

TransLink USA
TransLink USA is an embedded board and systems company located in Plano, Texas. TransLink is focused on leveraging Transmeta's power-efficient, high performance Crusoe processor technology to provide superior solutions in both standard and proprietary form factors for a number of key industries in the embedded market segment.

TransLink is developing board solutions for a number of embedded market segments including industrial control, communications, gaming, vending, point-of-sale, kiosk and data security. Crusoe SE processors will allow TransLink to provide previously unavailable single board computer solutions for the embedded market. Products based on the new Transmeta Crusoe SE product line will be in volume production starting in Q1 2003.

"TransLink is excited about the opportunity to partner with Transmeta to provide flexible, price competitive products with superior performance and long life cycles to the embedded market," said Rob Orsini, vice president of sales and marketing, TransLink USA.

Tri-M Systems, Inc.
Tri-M Systems and Engineering of Port Coquitlam, BC, Canada provides hardware and turnkey solutions for embedded systems, specializing in PC/104 products. For the past 20 years, the company has been both a manufacturer and distributor specializing in the PC/104 field.

Tri-M Systems is introducing the TMZ104, a breakthrough x86, single board computer in PC/104 format featuring the energy efficient, Transmeta Crusoe SE processor. With a compact size of 3.55" x 3.77" and off-the-shelf extended temperature rating, this board will be of interest to customers looking for embedded x86 technology in hostile, mobile, industrial, military, medical, or telecom environments where minimal power consumption, small board size and fanless operation are key design factors.

About Transmeta Corporation
Transmeta develops and sells software-based microprocessors and develops additional hardware and software technologies that enable computer manufacturers to build computers that simultaneously offer long battery life, high performance and x86 compatibility. Transmeta's family of Crusoe microprocessors is targeted at the notebook, Tablet PC and Internet appliance segments of the mobile Internet computer market, as well as a range of embedded applications. To learn more about Transmeta visit www.transmeta.com.

Transmeta, Crusoe, LongRun and Code Morphing Software are trademarks of Transmeta Corporation. All other product or service names mentioned herein are the trademarks of their respective owners.

Safe Harbor Statement
This release contains forward-looking statements regarding future events or the future financial performance of the company, which statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that these forward-looking statements are only predictions, which may differ materially from actual results or future events. All such forward-looking statements are based upon our current expectations but involve inherent risks and uncertainties. Such forward-looking statements speak only as of the date of this release, and the company will not necessarily provide updates of its forward-looking projections or forecasts. Risks and uncertainties that may have material effects on our future performance include general economic conditions, including the recent significant slowdown in the technology sector and semiconductor industry, the timing, rescheduling or cancellation of significant customer orders, potential fluctuations in our quarterly results, dependence on increasing demand for our Crusoe products, difficulties in developing or manufacturing new products in a timely and cost effective manner, market acceptance of our new products and of our customers' systems using our products, the growth of emerging markets that we are addressing, our customer concentration, the loss of revenue if a major customer were to cancel, reduce or delay a product order, inventory write-offs from a failure to forecast product demand accurately, our dependence on third parties for sourcing materials and providing manufacturing services, delays in product deliveries as we transition to smaller geometry process technologies, intense competition from Intel and others, rapid technological change, patents and intellectual property rights, volatility of our stock price, and the cyclical nature of the semiconductor market. We urge investors to review our regular filings with the Securities and Exchange Commission, including specifically our most recently filed report on Form 10-Q, which identifies and describes many of these and other important risk factors that could cause our actual results to differ from those contained in these forward-looking statements.