Transmeta Announces Processor Technology License and Sale Agreement for the Chinese Market; Agreement to Deliver Transmeta Cruso

Transmeta Corporation (Nasdaq:TMTAE), the leader in
efficient computing technologies, today announced the signing of asset
purchase and license agreements with Culture.com Technology Limited
(Culturecom), a fully owned subsidiary of Culturecom Holdings Ltd
(343.HK), a Hong Kong based technology company. This transaction is
subject to the completion of a number of conditions, including the
receipt of a technology export license from the U.S. Department of
Commerce, certain other third party consents and the signing of a
related services agreement with Transmeta.
   Pursuant to these agreements, Transmeta has agreed to sell,
through a combination of asset purchase and licensing agreements, its
Crusoe(TM) product line to Culturecom. As part of this agreement,
Culturecom will also license Transmeta's 130-nanometer Efficeon(TM)
technology to make and sell Efficeon-based products in China. In
consideration, Culturecom will make up-front cash payments totaling
$15 million to be escrowed pending the close of the transaction. In
addition to the up-front payments, Culturecom will also pay royalties
to Transmeta on sales by Culturecom of Crusoe and Efficeon products.
The transaction is scheduled to close in the fourth quarter of 2005.
   "This engagement helps deliver Transmeta processor technology to
the rapidly growing Chinese computing market through Culturecom, an
established provider of Chinese-language technology solutions," said
Arthur L. Swift, president and chief executive officer of Transmeta.
"This relationship is another example of Transmeta's commitment to
deploy our innovative technologies through licensing and synergistic
engineering services."
   As part of this transaction, Culturecom will also enter into an
engineering services agreement with Transmeta to facilitate the
transfer of the technology. Previously, Culturecom licensed
Transmeta's Midori Linux for the development of embedded applications
and, in conjunction with that license, Transmeta acquired, and
continues to own, a minority equity stake in Chinese 2 Linux
(Holdings) Limited, an affiliate of Culturecom.
   "This agreement expands Culturecom's ongoing business of providing
processors with embedded Chinese language technology," said Frank W.
T. Cheung, chairman and chief executive officer of Culturecom.
"Transmeta's unique x86-compatible processor architecture coupled with
Culturecom's Chinese language technology will facilitate the adoption
of modern computing technology by mainstream Chinese consumers."
   Transmeta will continue to manufacture its Crusoe and
130-nanometer Efficeon products until the transaction closes, and will
complete fulfillment of existing backlog in the subsequent transition
period. As previously announced, Transmeta will continue to support
its 90-nanometer Efficeon processors for Transmeta's strategic
partners.

   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.

   Safe Harbor Statement

   This release contains forward-looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Such statements speak only as of the date of this
release, and we will not necessarily provide updates of our
projections or other forward-looking statements. Investors are
cautioned that such forward-looking statements are subject to many
risks and uncertainties, and may differ materially or adversely from
our actual results or future events. Important risk factors that could
have material or adverse effects on our results include satisfaction
of the closing conditions to the transaction, the expected timetable
for completing the transaction, general economic and political
conditions, specific conditions and volatility in the markets that we
address, difficulties or delays in implementing our restructuring
plan, the potential loss of key technical and business personnel
resulting from our restructuring plan, practical challenges in
modifying our business model, our ability to satisfy the continued
listing requirements of the Nasdaq Stock Market, the adoption and
market acceptance of our products and technologies by current and
potential customers and licensees, our inability to predict or ensure
that third parties will license our technologies or use our
technologies to generate royalties, the rescheduling or cancellation
of significant customer orders, difficulties in developing or
manufacturing our products in a timely and cost effective manner, our
dependence on third parties for sourcing materials and providing
manufacturing services, intense competition and competitive pressures,
the ability to enter strategic collaborations or raise financing on
satisfactory terms, patents and other intellectual property rights,
and other risk factors. We urge investors to review our filings with
the Securities and Exchange Commission, including our most recent
reports on Forms 10-K, 10-K/A and 10-Q, which describe these and other
important risk factors that could have an adverse effect on our
results. We undertake no obligation to revise or update publicly any
forward-looking statement for any reason.

   Transmeta, Efficeon, LongRun2 and Crusoe are trademarks of
Transmeta Corporation. All other product or service names mentioned
herein are the trademarks of their respective owners.