Transmeta Reports Second Quarter 2008 Results

SANTA CLARA, CA. – August 6, 2008 – Transmeta Corporation (NASDAQ: TMTA) today announced financial results for the second quarter ended June 30, 2008.

Revenue for the second quarter of 2008 was $366,000, all of which was derived from licensing activities. This compared with $661,000 for the first quarter of 2008, comprised of $240,000 of license revenue, $168,000 of services revenue, and $253,000 of end-of-life product revenue.

Total operating expenses for the second quarter of 2008 were $1.9 million, compared with $3.1 million in the first quarter of 2008. Second quarter operating expenses included $5.9 million of income from the settlement and licensing agreement with Intel, net restructuring charges of $455,000, non-cash charges of $908,000 for amortization of intangible assets, and non-cash stock compensation charges of $1.3 million.

In the second quarter, the Company recorded interest income of $1.8 million, including $1.1 million of imputed interest income from the settlement and licensing agreement with Intel. Net income was $214,000, or $0.02 per share, compared with a net loss of $41,000, or $0.00 per share, in the first quarter of 2008.

The Company's cash, cash equivalents and short term investments at June 30, 2008 totaled $141.8 million. Transmeta continues to be debt free.

As announced today in a separate press release, Transmeta has entered into an agreement with NVIDIA Corporation granting NVIDIA a non-exclusive license to Transmeta's Long Run and LongRun2 power management technologies and other intellectual property for use in connection with NVIDIA products. Under the agreement, NVIDIA agrees to pay Transmeta a one-time, non-refundable license fee of $25.0 million. The Company expects to receive this cash payment of $25.0 million during the third quarter of 2008.

In the third quarter, the Company expects to recognize $5.9 million of operating income and $1.2 million of imputed interest income from the settlement and licensing agreement with Intel. Transmeta expects to be profitable on a GAAP net income basis in the third quarter of 2008 and continues to expect to be profitable for fiscal year 2008.

"We are very pleased to add NVIDIA to our list of licensees," said Les Crudele, president and CEO. "We believe the licensing agreement creates significant value for our stockholders. In addition, we continue to actively explore a full range of strategic alternatives and continue to be engaged in discussions with other companies about potential ways to increase value for all of our shareholders."

Conference Call

Transmeta's management will host a conference call today at 5:00 p.m. Eastern time / 2:00 p.m. Pacific time to discuss the operating performance for the quarter. The conference call will be available live over the Internet at the investor relations section of Transmeta's website at www.transmeta.com. To listen to the conference call, please dial (913) 312-9304. A recording of the conference call will be available for one week, starting one hour after the completion of the call, until 11:59 p.m. Pacific time on August 13, 2008. The phone number to access the recording is (719) 457-0820, and the passcode is 3504365.

About Transmeta Corporation

Transmeta Corporation develops and licenses innovative computing, microprocessor and semiconductor technologies and related intellectual property. Founded in 1995, we first became known for designing, developing and selling our highly efficient x86-compatible software-based microprocessors, which deliver a balance of low power consumption, high performance, low cost and small size suited for diverse computing platforms. We are presently focused on developing and licensing our advanced power management technologies for controlling leakage and increasing power efficiency in semiconductor and computing devices, and in licensing our computing and microprocessor technologies to other companies. To learn more about Transmeta, visit www.transmeta.com.