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Transmeta cuts sales forecast almost in half

Transmeta cuts sales forecast almost in half

Chip maker Transmeta on Wednesday cut its second-quarter revenue forecast almost in half, blaming economic woes in Japan where it does much of its business.

The company said it now expects revenue for the three months ending June 30 to be 40 per cent to 45 per cent less than the $US18.6 million it reported in its fiscal first quarter. As recently as April Transmeta predicted that its second-quarter revenue would be slightly above the first-quarter level.

The chip maker blamed the expected shortfall on "economic weakness" which it said appears to have spread from the US to Japan, where most notebooks that use Transmeta's low-power Crusoe processors are sold.

In conjunction with the projected revenue decrease and Transmeta's planned transition to a more advanced, 0.13-micron manufacturing process later this year, the company has also analyzed its inventory levels and expects to take an inventory charge during the second quarter, Mark Allen, Transmeta's president and chief executive officer, said in a statement. He didn't say how great that charge might be.

Transmeta's (TMTA) shares on the Nasdaq ended the regular session down 7.35 per cent, at $US12.60. In the after hours markets the stock had spiralled down a further 36.5 per cent at the time of this report, to $8.00, according to Reuters Instinet.

Transmeta's processors are used in range of portable computers from Sony Corp.'s Picturebook, which used a 667MHz Crusoe chip, to Casio Computer's Cassiopeia notebooks. In March, Transmeta said it is one of the company whose chips are being used in trial versions of Microsoft's Tablet PC, along with rival Intel.


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