Transmeta and Culturecom Mutually Terminate Contingent Processor Technology License and Sale Agreement for the Chinese Market

SANTA CLARA, Calif.--Feb. 9, 2006--Transmeta Corporation (NASDAQ:TMTA), the leader in efficient computing technologies, announced today that it has mutually agreed with Culture.com Technology Limited (Culturecom) to terminate two related asset purchase and license agreements with Culturecom. Under those agreements, which the parties announced in May 2005, Transmeta would have sold its Crusoe(TM) product line to Culturecom and would have licensed Transmeta's 130-nanometer Efficeon(TM) technology to Culturecom to make and sell Efficeon-based products in China. The two companies mutually and amicably elected to terminate those agreements at this time based upon their mutual concern that they could not satisfy all of the approval conditions necessary to close the agreements in a timely fashion.

"Our Crusoe and 130nm Efficeon processors are still considered very advanced, controlled technology from an export control perspective, even though they have reached the end of their competitive life-cycle for Transmeta's ongoing business," commented Arthur L. Swift, president and CEO of Transmeta. "After several meetings with U.S. government officials, Transmeta and Culturecom mutually concluded that the necessary technology export control approvals could not be obtained for these two agreements within the timeframe necessary to satisfy Culturecom's commercial requirements."

The termination of the two agreements is not expected to have any adverse impact on Transmeta's financial outlook. Transmeta has not included any potential benefit from any prospective transaction with Culturecom in its financial guidance or projections to date, in part because of the uncertainties associated with closing conditions such as technology export license approval for advanced microprocessor technologies.

Transmeta and Culturecom have had a historical business relationship dating from 2003, when an affiliate of Culture.com, Chinese 2 Linux (Holdings) Limited, licensed Transmeta's Midori Linux software for the development of embedded applications. Transmeta and Culturecom have reaffirmed their continuing commitment to work together on initiatives of mutual interest.

About Transmeta Corporation

Transmeta Corporation develops and licenses innovative computing, microprocessor and semiconductor technologies and related intellectual property. Founded in 1995, Transmeta first became known for designing, developing and selling its 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 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.