TAIPEI, Taiwan -- With many of Taiwan's notebook-computer manufacturers supporting its new architecture, Transmeta Corp. is poised to take on Intel Corp. in the CPU market.

"We want to make a big splash in the market, and Taiwan is going to be part of it," Transmeta's chief executive, David R. Ditzel, told EBN during an interview this in Taipei. "We see a lot of excitement in Taiwan."

Quanta Computer Inc. and First International Computer Inc. are among the 20 companies building Transmeta's Crusoe processors into their newest laptops and Internet Appliance (IA) products, according to Transmeta.

In January, the company ended several years of silence in the marketplace, announcing two Crusoe processors, the 500- and 700-MHz TM5400, optimized for mobile PCs; and the 333- and 400-MHz TM3120, designed for low-cost Internet-access terminals. Using a patented "code morphing" technology, both chips are compatible with Windows-PC applications, as well as the mobile flavor of Linux that Transmeta developed.

Transmeta is touting Crusoe, which combines hardware and software, as a low-power, low-cost chip, and analysts say it has the potential to compete with Intel, particularly when it comes to mobile devices such as laptops and Web pads.

Transmeta has generated a significant buzz among major players in the last two weeks. Gateway Inc., Transmeta's first high-profile client, announced it has agreed to buy at least 100,000 processors for two Internet appliances the PC maker is designing with America Online Inc. (see May 30 story).

IBM Corp. said that for technology-development purposes, it plans to demonstrate a ThinkPad notebook using the Crusoe at a June trade show in New York. The company is considering offering Transmeta-based models this year, an IBM spokesman said.

Transmeta, a five-year-old upstart based in Intel's backyard in Santa Clara, Calif., has good reason to seek partners in Taiwan. The island's notebook makers will ship 14.8 million units this year, accounting for 64% of the global market, according to Chen Wen-tang, a senior analyst at Market Intelligence Center, a research firm based here.

"Taiwan's the best place for Transmeta to set an industry standard since almost all of the 10-largest laptop companies worldwide are outsourcing to Taiwan," Chen said. "Companies here are very capable of meeting customers' needs in terms of technology and design."

Some 60% of notebooks sold by the world's top 10 PC manufacturers, including Dell Computer Corp., IBM, and NEC Corp., were made in Taiwan last year, up from 45% in 1998, he said.

Transmeta's office in Taiwan is the company's largest outside the United States, Ditzel said, adding that the Taipei branch employs a team of 10 people in sales, marketing, and technical support. Transmeta has 250 employees worldwide.

"We're expecting to ship 1 million to 2 million units for Transmeta later this year," said Chin Wu, president of Acer Laboratories Inc., a unit of Taiwan's Acer Inc., which builds the ALI 1535 south bridge for Crusoe. "If Crusoe's prices are competitive enough, the volume could jump to 4 million to 5 million next year."

Transmeta charges $100 to $200 for the chip used in notebook PCs, and less than $100 for chips used in IA products, sources said.

Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) and United Microelectronics Corp. (UMC), the two largest pure-play foundries in the world, are testing Crusoe for Transmeta, according to Ditzel. "2001 would be appropriate for us" as a date to begin using their foundries, he said. The company now uses IBM's fab to produce the Crusoe processors.

Recently, Transmeta said that it received $88 million in funding from AOL, Compal Electronics, Compaq, FIC, Gateway, Quanta, and Sony in a deal that may lead to an initial public offering later this year.

The corporate partners invested $72 million in Transmeta, it said. A further $16 million came from other investors, including Deutsche Bank, Five Points Capital, Invemed Associates, Paul Allen's Vulcan Ventures, Soros Fund Management, and Van Waggoner Capital Management.