WIRE:11/29/2000 21:26:00 ET Transmeta Confirms Recall of Crusoe Chips SAN FRANCISCO (Reuters) - Transmeta Corp. (TMTA.O) confirmed on Wednesday that it is working with Japanese computer maker NEC Corp. (6701.T) to recall notebook computers built with flawed versions of its power-saving Crusoe microprocessor. Transmeta said in a statement that the recall would take in "fewer than 300" NEC computers at risk of failing if the user reinstalled operating software. The company said that the recalled Crusoe chips came from a limited manufacturing batch, and it said any remaining inventory of the defective chips had been returned to Transmeta. Shares of Transmeta tumbled 15 percent to close at $23-13/16 on Nasdaq on Wednesday after a Japanese newspaper reported that NEC was considering a recall. In after-hours trade, Transmeta shares extended that slide, taking the cumulative loss on the day to nearly 25 percent. The shares last traded on Instinet at $21. The stock had surged to $50 on its first day of trading following its highly anticipated $273 million initial public offering on Nov. 7. The Crusoe chip, the first designed by Transmeta, uses elaborate software instructions rather than hardware to perform certain functions, cutting power consumption. "Transmeta stands behind the Crusoe and will continue to work with its customers to insure Crusoe"s quality and reliability," the company statement said. Sony Corp.(6758.T), which uses the same Crusoe chip in its notebook PC, has also reportedly started a probe, according to Japan"s Yomiuri Shimbun. Neither Sony nor Transmeta could be reached immediately for comment. Rival Intel Corp. (INTC.O) already has chips on the market that consume about the same amount of power -- roughly 1 watt -- as the Transmeta chip, which is aimed at mobile computing and other wireless, handheld devices requiring long battery life.

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-- Doris (nocents@bellsouth.net), November 30, 2000