SAN JOSE, Calif. — As many as 300 laptops by NEC Corp. are being recalled because of a problem with the microprocessors made by Transmeta Corp.
The chipmaker, which is based in Santa Clara, Calif., said Wednesday it was working with NEC on the recall of a small batch of LaVie MX laptops using Transmeta's energy-saving Crusoe microprocessors. NEC, which announced its new Crusoe-powered laptop in mid-October, had just started to ship the products in Japan, said Transmeta spokesman Philip Bergman.
The chip problem, discovered recently by NEC during routine testing, occurs only when a user reinstalls the computer's operating system. Because of the design-related defect, the reinstallation would fail, Bergman said. Nothing else on the computer would be damaged.
It was unclear late Wednesday if any other laptop makers using Crusoe chips, including Sony Corp. and Fujitsu Ltd., were affected by a similar problem, but Bergman said Transmeta believes the problem is "a limited issue" only with NEC.
Fears of a big recall sent Transmeta's shares tumbling 18 percent, or $5.06 to $23.81 on Wednesday. The company's stock has plummeted by more than 50 percent since its high of $45.25 reached on Nov. 7, the first day of its high-profile initial public offering.
While such problems may occur in the chip business — chip giant Intel Corp. has had to recall some of its chips in the past — it is especially troublesome for Transmeta since it is just starting to gain customers and win market share from Intel.
Transmeta worked in secret development for five years before introducing the Crusoe chip in January. The chip is revolutionary because it uses a "code-morphing" software technology and is designed to consumer less power.
Transmeta, which is targeting the portable computer and Internet appliance market, touts that its chips prolong battery life.