Transmeta, a designer of power-efficient microprocessors, recently said it finalized its plans to exit x86 chip business and concentrate on licensing its technologies and microprocessor designs to other companies. The firm believes such move will increase the company’s profitability.

During the first quarter of 2005, Transmeta plans to modify its existing business model of designing, developing and selling x86-compatible microprocessor products, including its Crusoe and Efficeon families. The main focus of the company is planned to be licensing of its intellectual property, including power-saving technologies and chip designs. As part of its overall restructuring plan, Transmeta plans to reorganize its operations on March 31, 2005 to align with the business prospects it has firmly identified at that time.

Shortly the company is expected to halt the manufacturing of its 130nm microprocessors; still, 90nm production will continue in the near-term. In long-term the firm plans to ensure product supply for its customers by signing special agreements with one or a number of strategic partners.

“We have received consistently strong, positive feedback in support of Transmeta’s technology, and customers clearly desire the continued availability of our products and technology, either directly or through some form of strategic collaboration,” said Matthew Perry.

Transmeta has notified its employee base that it may reduce its staffing as early as March 31, 2005. Reduction of the staff may prevent the firm from developing certain products or types of technologies in future, however, this will allow the firm to cut operating costs and snot become bankrupt.

Transmeta lost millions of US dollars throughout its 10 years history trying to sell microprocessors.

Over the last two years, Transmeta has worked to establish a revenue stream based upon the licensing of its proprietary technology and intellectual property. The company granted licenses to NEC Electronics and Fujitsu Limited to use Transmeta’s LongRun2 technologies for power management and transistor leakage control. Recently Transmeta said a “global consumer electronics company” had inked agreement to license the company’s power-saving techniques.