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LAS VEGAS -- Chip maker Transmeta still hasn't announced a shipment date for its delayed next-generation Crusoe processor, which will face tough competition from Intel's recently announced ultra-low voltage processor in the market for very compact servers, but Transmeta isn't worried, David Ditzel, the company's vice chairman and chief technology officer says.

Transmeta is at the Comdex trade show here this week to meet with customers and the press, trying to interest both groups in the elusive 800 MHz Crusoe TM5800, and in devices using its current processors, such as servers and notebooks of all sizes. "This is a very convenient meeting place," Ditzel said.

Last month, Transmeta said it will begin shipping the TM5800, which was originally due to ship in June, in large quantities this month. Ditzel would not give a more specific timeframe this week. "We'll be making an announcement on that soon," Ditzel said, defending the second delay of the chip. "There are tons of tests you want to go through and these guys just weren't finished."

New Challenge

Transmeta suddenly faced a new problem this week when Intel launched an ultra-low voltage 700 MHz Pentium III processor, aimed directly at the server blade market.

The market for these ultra-dense server boards is still young, and until recently it appeared that Transmeta had the advantage. Texas-based RLX Technologies, one of the only companies to actually sell these blades, is building its products on Transmeta's Crusoe processor. However, a week ago, sources familiar with RLX's plans said the company would likely begin offering processors from Intel in future products.

"RLX has no announcements to make with Intel at all at this point," Ditzel said. "A lot of those stories have been overblown."

Intel's new processor will be used in server blades from vendors including Compaq, Hewlett-Packard, and Dell. Compaq will roll out the new processors in its QuickBlade product line in the first quarter of 2002.

According to Sally Stephens, director of marketing for Compaq's density-optimized servers, one of the key advantages Compaq sees in Intel's chips over those of Transmeta is that Intel's new server processor and companion chip set offer support for error correcting code (ECC) memory, which checks and corrects code errors in memory, and the ability to support up to 2GB of RAM. Both are features that Transmeta will first offer on its Crusoe TM6000, which doesn't begin shipping until mid-2002.

Transmeta's Ditzel dismissed Intel's use of ECC as merely a marketing item. "If you actually look and talk to DRAM makers and ask them how important ECC is, they'll tell you it's not very important," he said. "I think it's a bit of overstated marketing at this point."

Playing Partners

One analyst disagreed with Ditzel's dismissal of ECC support. "I don't buy it, and more importantly the enterprise market doesn't buy it," said John Enck, senior research director for Gartner Group. "When we're talking about serious workload, it absolutely makes a difference."

Even more important is the perception of ECC, Enck said. "Even if you want to argue that it doesn't actually make a difference, it does in the minds of the enterprise market," he said.

Transmeta's chances of being adopted by larger vendors are slim, even if only because it's easier for them to do business with Intel, Enck said. "Even if Transmeta's chip was superior, they're really failing to generate enough interest from the volume producers," he said. "It's really going to come down to the partnerships, and it's a lot easier for those guys to do business with Intel."

Ditzel remains confident that the Crusoe TM5800 and TM6000 are strong offerings, whether they're in a blade, a notebook, or a tablet PC, but for the moment, the company can still claim to have reached the blade market first. "It was really Transmeta that came out and went to the blade market," Ditzel said. "Intel came later."