Montalvo Systems is reportedly cutting two thirds of its staff, VentureBeat has learned. The Santa Clara, Calif., chip design company is one of the most ambitious startups in Silicon Valley, but it is running out of time raising money to rescue its business.

VentureBeat reported earlier that Montalvo was attempting to raise more than $100 million in funding but had been unsuccessful. The company has already raised $73 million from the likes of NEA-IndoUS Ventures and Bay Partners. CNET’s independently confirmed that layoffs may be taking place.

But the company has run into delays finishing its chip, which is a low-power Intel-compatible processor with an innovative design. The chip has asymmetric cores. That means it has big and small processors on a single power-efficient chip. That saves power because the smaller, power-saving cores can handle small tasks while the larger cores handle big tasks.

They are the most ambitious startup challenging Intel. But there is a long list of failures in this area, including Transmeta, which is next door to Montalvo. Through the years, only Advanced Micro Devices has managed to compete with Intel, which can afford to spend billions of dollars on chip factories and processor design.

Attempts to reach Montalvo CEO Matt Perry were unsuccessful. Peter Glaskowsky, vice president of design, declined to comment. It’s not clear how many jobs are being cut. At one point, Montalvo had grown to nearly 300 people, with engineers in Santa Clara and India.

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