Transmeta Monday said it will release its next generation TM8000 processor (currently code-named Astro) in September 2003 with some of the first products debuting before the end of the year.

During its second-quarter earnings report, the Santa Clara, Calif.-based chipmaker said the chip will find its way mainly into laptops with 12- and 14-inch displays. Previously, company executives have also looked at using the Astro in high-density blade servers (define) and small office/home office servers. Earlier this year, the company said the Astro would debut sometime after July 1.

"In the second quarter, we sampled 1.1 GHz TM8000 processors and customer feedback has been positive," said Transmeta CEO Dr. Matthew Perry. " We have a lot of customers that support Internet-related technology, MP3s, multi-media, MPEG-4 and DivX. [With the TM8000], applications can run about 50 percent faster per clock cycle, and multimedia applications up to 80 percent faster per clock cycle, than our current processor."

Perry also said an unnamed top-tier OEM has signed on to use the TM8000 in one of its non-mobile products, which the company says could payoff somewhere between $6 to $8 million in revenue in the first half of 2004.

"We will continue to explore revenue opportunities for leveraging our IP into new markets. We will also continue to control our spending, to monitor closely the growth ramp of these emerging markets and our TM8000 processor, and to position ourselves appropriately to have the flexibility to evaluate a variety of funding opportunities," Perry said.

The chip includes integrated Northbridge core-logic technology, which connects the CPU to the system memory and the AGP and PCI buses. The three new high performance bus interfaces include an on-chip 400 MHz HyperTransport bus interface, a technology taken straight out of AMD's design playbook as well as Double Date Rate 400 (DDR-400) DRAM (define) memory interface; and AGP-4X graphics interface all on the same die. Previous versions of Transmeta chips took the PCI graphics approach.

Transmeta said the majority of the $24.6 million the company has spent in the last six months on research and development has been poured into the Astro. The company said the payoff will be when it goes toe-to-toe with its most obvious competition: Intel and its XScale processors as well as its Centrino chipsets.

"Some say Intel is getting $100 more per notebook and we seeing a lot of interest in our technology that may be lower than what they have to offer," Transmeta CFO Svend-Olav Carlsen said.

In addition to laptops and servers, Transmeta said the TM8000 would also be marketed toward smaller form factors including what it categorizes an Ultra Personal Computer (UPC) such as products coming out of OQO.

"Revenue from several of our UPC manufacturers and embedded customers is expected to ramp over the next few quarters.

The Astro aside, Transmeta said its net revenue for the second quarter of fiscal 2003 was $5.1 million, compared with $6.0 million reported in the first quarter of 2003 and $7.5 million in the second quarter of 2002. The loss was $22.0 million, or a loss of $0.16 per share.

Going forward, Transmeta said it expects third quarter revenue to be about the same as the current quarter, with a net loss per share of $0.16 to $0.17 and a pro forma net loss per share of $0.13 to $0.14.

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