Transmeta Launches Fanless Digital Entertainment Center Initiative at

    Business Editors/High-Tech Editors
    2005 International CES

    SANTA CLARA, Calif. & LAS VEGAS--(BUSINESS WIRE)--Jan. 6, 2005--Transmeta Corporation (Nasdaq:TMTA), the leader in efficient computing, and multiple complementary software and hardware technology providers today announced an initiative to deliver high performance fanless Digital Entertainment Centers, powered by Efficeon(TM) technology to the market. These systems feature full x86 compatibility, functionality and versatility in sleek consumer electronics form factors. Multiple new prototype designs based around Efficeon technology are being demonstrated publicly at the 2005 Consumer Electronics Show (CES) in Las Vegas to launch Transmeta's initiative centered around the Digital Entertainment Center or "media center" applications.
    The high performance and cool operation inherent in the Efficeon processor architecture makes it ideally suited for this new breed of quiet, small form factor Digital Entertainment Centers. Thanks to the high performance of Efficeon, the new Digital Entertainment Centers deliver the latest in digital media content including television, pictures, music, videos, internet access and much more. Furthermore, the low heat operation of the processor allows for fanless cooling and quiet operation, making Digital Entertainment Centers better suited for living room than most current competitive product offerings.
    Transmeta is developing a Digital Entertainment Center reference design and evaluation platform to accelerate time to market and enable evaluation by strategic OEM partners adopting Efficeon technology for these devices. This reference design package, scheduled for availability in Q1 2005, will provide partners with full schematics, layout, bill of materials, drivers, and a design guide. The design features a high performance, compact-package Efficeon 8820 processor, the ATI RADEON 9550 visual processing unit, and the full-featured ULI M1563 southbridge, all integrated in a single compact motherboard. The board also features PCI expansion capabilities for TV tuners, ten USB ports, and outputs necessary to enable high-quality consumer audio and video, supporting both worldwide and EU-specific standards. Additionally, many of the integration partners are available for immediate consulting services for OEM adopters of this design.
    "With our Digital Entertainment Initiative, Transmeta is showing the ability for Efficeon technology to enable a quiet and fanless form factor for the ultimate entertainment experience in the living room," said Matthew R. Perry, president and CEO of Transmeta. "Synergistic with our increased focus on technology licensing, this initiative can clear the path for consumer electronics manufacturers to more rapidly integrate Efficeon technology into their own entertainment products."
    The prototype units being displayed publicly at CES 2005 will show examples of the Digital Entertainment Initiative with a compelling range of applications, performance levels and price points. Transmeta has been working closely with a number of key complementary manufacturers and designers, in both hardware and software, to enable fast time to market.
    These prototypes feature the Efficeon processor running at speeds up to 1.6 GHz and demonstrate different choices in operating systems and interfaces, including Microsoft Media Center Edition 2005 and MythTV based on the ESG's Royal Linux operating system. State of the art software CODECs are also being shown, such as Windows Media High Definition video from Microsoft, and high-definition video content being decoded by Moonlight's H.264 CODEC. A prototype of a high end Digital Entertainment Center utilizing Zoran's Generation-9 hardware accelerator demonstrates a hybrid approach for delivering up to four streams of shared high-definition content in a cost-effective household multi-room system.

    Complementary Technology Vendors

    ATI Technologies Inc.

    ATI Technologies Inc. is a world leader in the supply of graphics, video and multimedia products for desktop, workstation and notebook PCs, digital televisions, cell phones and game consoles. A pioneer, innovator and market leader in the graphics industry, ATI is built upon the strength of its people, products and technology excellence, its customer focus, and its ability to identify and capitalize on key inflection points where new technologies and markets converge. For more information, visit www.ati.com.
    ATI Technologies, Inc., the global leader in PC graphics, provides the graphics solution adopted in Transmeta's digital entertainment center reference design, enabling a compelling multimedia experience in the living room. "Entertainment in the home is an important and growing market that ATI views as strategic in the coming years," says Rick Bergman, Senior Vice President and General Manager, PC Business Unit, ATI Technologies. "The Radeon 9550 VPU adopted by Transmeta will offer a rich graphics solution to match the performance and efficiency of Transmeta's Efficeon processor in this media reference design."

    Embedded Software Group

    Embedded Software Group provides experienced software development and integration services for embedded markets and application-specific devices including digital entertainment centers. As part of this initiative and on behalf of Transmeta, ESG has been developing and porting media software to Transmeta Efficeon's processor. For more information, visit www.embeddedsoftwaregroup.com.
    "With more than 20 years of experience with Linux, Windows CE, and similar software infrastructures, ESG is proud to support Transmeta by providing superior porting, driver development, and integration expertise," said Sahel Binesh, president and CEO of Embedded Software Group. "Transmeta customers can now accelerate their own time-to-market by leveraging ESG's expertise, and experience, with Efficeon and related system components."

    Hauppauge Digital

    Hauppauge Digital is a leading developer and manufacturer of analog and digital video, TV and data broadcast receiver products for personal computers. Its products are featured in a range of media center and digital entertainment center systems. For more information, visit www.hauppauge.com.
    "Supporting the leading media environments, ranging from Windows XP Media Center Edition 2005 as well as a number of evolving Linux-based media packages, Hauppauge provides TV tuner cards with rich PVR functionality," says Ken Plotkin, CEO of Hauppauge Digital. "Transmeta has demonstrated Hauppauge technology extensively in their fanless Digital Entertainment Center prototypes, and we are eager to support their OEM customers who choose our products to complement Efficeon in these unique systems."

    InterVideo

    InterVideo is a worldwide provider of audio and video multimedia products, with leading performance and features for a range of media types. For more information, visit www.intervideo.com.
    "InterVideo's leading WinDVD software and associated Codecs are premier solutions for media center applications," says Mike Ling, VP of Marketing of InterVideo, Inc. "Transmeta's initiative to deliver quiet digital entertainment centers are ideally complemented by highly optimized software solutions like ours, and we look forward to helping deliver these exciting products into the living room."

    Moonlight Cordless Ltd.

    Moonlight, provides high quality video MPEG-2 and H.264 software CODEC products based on its core technology, enabling digital entertainment centers to offer attractive video playback over the network. For more information, visit www.moonlight.co.il.
    "As Transmeta delivers the unique benefits of the Efficeon processor, it opens up new opportunities for penetration into homes and living rooms for digital entertainment centers," said Isaac Cohen, vice president of business development at Moonlight Cordless Ltd. "As increasing numbers of homes have access to broadband Internet connectivity, Moonlight's CODEC products open the door to video streams for these types of systems at quality levels and low bit rates never before possible."

    ULI Electronics, Inc.

    ULI Electronics, Inc. is Transmeta's leading south bridge partner, offering a range of south bridges and related chips to complement the Efficeon processor. With remarkable array of integral connectivity features, these highly integrated products provide energy efficiency, proven compatibility, and diverse IO capabilities to run today's most demanding applications. For more information, visit www.uli.com.tw.
    "Transmeta is leading the way to deliver quiet digital entertainment experience to the living room," says Mr. Alex Kuo, president of ULi Electronics Inc. "ULi is a proud partner in this initiative, and will deliver a range of new south bridge solutions this year for Efficeon that offers different feature sets and price points for this exciting market."

    VBox Communications Ltd.

    VBox's variety of innovative products suits the current and evolving needs of corporate networking and household entertainment. The company is focused on providing high quality products that bring rich media content to small and medium corporations, digital TV broadcasters and Internet infrastructure providers. For more information, visit www.vboxcomm.com.
    "The release of cost-effective Media Center solutions and the increase in digital TV services being offered to consumers should accelerate the penetration of digital technology," said Yosi Brosh, VP Sales and Marketing at VBox Communications. "VBox's DTA150 and DTA151 cards are attractive solutions to complement Transmeta's Digital Entertainment Center design, enabling users to watch and record Digital High Definition television from their media center."

    Zedeon

    Zedeon is developing products for the Digital Lifestyle. The company is currently working on products for the storage, archival, distribution and playback of digital content within the home. For more information, visit www.zedeon.com.
    "Zedeon is pleased to be working with Transmeta to bring the benefits of the power efficient Efficeon processor to the digital home. This new High Definition Entertainment Center/Client system can be used for HDTV, photos, music, videos and more," said Prem Talreja, president of Zedeon. "Using the Efficeon processor, we have developed a high performance quiet appliance in an AV form factor, perfect for living room use."

    Zoran Corporation

    Zoran has focused on delivering high quality media products that meet the specific requirements of DVD players and recorders, digital televisions and set top boxes, and other new categories of consumer electronics. Zoran's Generation9 Elite HDTV processor offers increased performance over previous generation products and features Connect-And-Share technology to enable OEMs to build network-ready products for the Digital Home. For more information, visit www.zoran.com.
    "We are pleased with the opportunity to collaborate with Transmeta on the Digital Entertainment Initiative. Pairing Zoran's Generation9 Elite solution with Transmeta's Efficeon processor is an ideal approach that meets the needs of Digital Entertainment Centers," said David Pederson, vice president corporate marketing at Zoran. "Zoran is focused on delivering a better way for consumers to connect and share all of their pictures, music and home videos in the comfort of their living room."
    Transmeta will be hosting demonstrations of the new Efficeon technology based fanless Digital Entertainment Centers at the CES Conference on January 6-9, 2005 at the Las Vegas Convention Center, Booth 36235 South Hall 4.

    About Transmeta Corporation

    Founded in 1995, Transmeta Corporation designs, develops and sells highly efficient x86-compatible software-based microprocessors that deliver a compelling balance of low power consumption, high performance, low cost and small size. Our products are valuable for diverse computing platforms demanding energy efficiency, low heat and x86 software compatibility. We also develop 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.

    Safe Harbor Statement

    This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements speak only as of the date of this release, and we will not necessarily provide updates of our projections or other forward-looking statements. Investors are cautioned that such forward-looking statements are subject to many risks and uncertainties, and may differ materially or adversely from our actual results or future events. Important risk factors that could have material or adverse effects on our results include general economic and political conditions and specific conditions and volatility in the markets that we address, the rescheduling or cancellation of significant customer orders, market acceptance and adoption of our new products by our present and future customers and end users, difficulties in developing or manufacturing new and existing products in a timely and cost effective manner, our dependence on third parties for sourcing materials and providing manufacturing services, intense competition and competitive pressures, the ability to enter strategic collaborations or raise financing on satisfactory terms, the risks and costs inherent in any efforts that we may undertake under a modified business model, our ability to recognize significant licensing revenue in the future, patents and other intellectual property rights, and other risk factors. We urge investors to review our filings with the Securities and Exchange Commission, including our most recent reports on Forms 10-K, 10-Q and 8-K, which reports describe these and other important risk factors that could have an adverse effect on our results. We undertake no obligation to revise or update publicly any forward-looking statement for any reason.

    Transmeta, Efficeon, AntiVirusNX, LongRun, LongRun2, Code Morphing and Crusoe are trademarks of Transmeta Corporation. All other product or service names mentioned herein are the trademarks of their respective owners.

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CONTACT: Transmeta Corporation Kenn Durrence, 408-919-5985 kenn@transmeta.com or Investor Relations Kristine Mozes, 408-919-6907 kristine@mozescommunications.com

KEYWORD: NEVADA CALIFORNIA TRACK INDUSTRY KEYWORD: HARDWARE COMPUTERS/ELECTRONICS ENTERTAINMENT MUSIC SOFTWARE TRADESHOW PRODUCT SOURCE: Transmeta Corporation

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