No. 2 microprocessor maker Advanced Micro Devices Inc. (AMD). invested $7.5 million for preferred stock in Transmeta Corp., the companies said on Friday, sending Transmeta shares up 32 percent.

Transmeta, which has previously partnered with AMD, focuses solely on developing semiconductor technologies for other companies.

It is still best known for its Crusoe and Efficeon computer microprocessors, which went on sale in 2000 when it strived to be a chip manufacturer. Their small design and efficient use of power allowed the fledgling company to hold its own against No. 1 chipmaker Intel Corp., but only for several years.

In 2005, Transmeta said it was pulling out of the microprocessor business, under heavy pressure from Intel, which had beefed up the technology and marketing efforts behind its laptop microprocessors.

In July 2006, Transmeta hired AMD to distribute the last microprocessor in its product line -- a 90-nanometer version of the Efficeon. Its sales were poor, and Transmeta took a charge to write down unsold inventory at the end of last year.

In 2001, AMD obtained $13.6 million in Transmeta's common stock as part of a technology licensing agreement between the two companies.

Shares of Santa Clara, California-based Transmeta rose 22 cents to 92 cents in heavy morning trade on Nasdaq.