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Top Secret Processor Project Slated for Unveiling
By Martha Mendoza   Associated Press
SANTA CLARA, Calif. — A top-secret computer chip designed and funded by a powerful group of high-tech leaders is slated to roll out this Wednesday amid a flurry of high expectations — and intrigue.

For the past five years, Transmeta Corp. has secretly toiled away on the project under the leadership of CEO David Ditzel, a former chip designer for AT&T;'s Bell Labs and Sun Microsystems Inc.

What makes Transmeta all the more interesting is the cast of characters attached to the Santa Clara-based company. Employees include superstar designers like Linux creator Linus Torvalds, while investors consist of industry barons like Microsoft Corp. co-founder Paul Allen and billionaire financier George Soros.

"This is going to really raise eyebrows, and yes, the big chip makers — Intel and AMD — should be worried," said Drew Peck, a microprocessor analyst from Cowen & Co. "It doesn't hurt that it's coming from some of the most extraordinarily talented people in the semiconductor business."

The company has refused to reveal exactly what it is developing, cloaking its actions in a veil of mystery — thus adding to the hype. But Transmeta says it's finally ready to spill the beans.

Reporters and analysts have been told to plan to spend the better part of Wednesday with Transmeta at a 175-acre historic estate and villa in the foothills of the Santa Cruz Mountains.

There, according to marketing officials, "the world's first family of software-based smart microprocessors" will be unveiled and demonstrated.

The coy approach continues on Transmeta's Web site.

"We rethought the microprocessor to create a whole new world of mobility. Arriving January 19th, 2000. The Crusoe Processor."

The words fade into a bucolic picture of illusory footprints meandering across a white sandy beach.

Buried in the Web site's source code, an additional message discloses that "Crusoe will be cool hardware and software for mobile applications."

"Obviously their ploy here is to generate a lot of buzz in advance, and evidently they've succeeded in that regard," said Peck.

So what's behind the buzz?

Transmeta officials have given hints that Crusoe is a new type of semiconductor, or computer chip. The company designs them, but will not manufacture them.

Crusoe's combination of hardware and software could create a viable challenge to industry leader Intel Corp. But until Transmeta's product and strategy are unveiled, analysts remain cautious in their outlook.

"It's certainly a promising team," Gartner Group analyst Martin Reynolds said. "Running up against Intel is not a good thing to do, but if you look at processors that do lots of multimedia stuff, maybe there is a place for something truly innovative there. For example, look at where set top boxes are going. There are different requirements for processors for those things."

Joe Byrne, a chip analyst for Dataquest, was equally wary.

"There's a lot of competition in this market, so you have to be guarded in terms of your outlook," said Byrne. "However, this is a very interesting cast of characters and it will be interesting to see what they've produced."

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