Here's the Forbes article:
I'm not worried though.
June 08, 1999
No buyers for Cyrix?
By Om Malik
EW YORK. 09:30AM EDT—It's been a month since National Semiconductor's (nyse: NSM) chief executive announced his company would exit the PC microprocessor business and sell its Cyrix division.
Four weeks later it has become quite clear that National Semiconductor is having a tough time finding buyers for both Cyrix and its South Portland, Me. factory, which is also on the auction block.
One of the problems National Semiconductor is said to be facing is the hefty price it wants for Cyrix. Sources familiar with the situation say National wants $375 million for the Cyrix unit. So far it is having no luck. A spokesman for National Semiconductor declined to comment. When asked about the fab sale, he would say only that "no fab deal has been finalized as yet." Whatever the terms, the sale is expected to close by September.
This is the latest in the sad tale of Cyrix, which was acquired by National in 1997 for $550 million. Cyrix, then an unprofitable, cash-starved microprocessor maker based in Richardson, Tex., was key to National Chief Executive Brian Halla's desire to place National in the "system on a chip" business.
In an interview with Forbes.com at the time, he envisioned a world where Cyrix chips powered a wide selection of "information appliances." Since then an ensuing price war in the microprocessor business has seen Cyrix-related revenues shrink 35% from $77 million in the second quarter of fiscal 1998 to $50 million in the second quarter 1999 (ended February 28).
As reported earlier by Forbes.com several companies have been linked with Cyrix and the factory. Among the companies said to be interested in nibbling at the pieces include International Business Machines (nyse: IBM) and Taiwan Semiconductor Manufacturing Corp. (nyse: TSM). In fact several TSM executives had meetings with the National management and are said to be interested in picking up the Maine fabrication unit. Apparently, TSM has now bid adieu to the fabrication unit.
On the Cyrix side, IBM, the fourth largest PC maker in the world, also looked at Cyrix as the company has often expressed interest in entering the x86 chip market. As recently as six months ago, IBM was known to have been exploring opportunities with Santa Clara, Calif.-based ultra-secretive chip startup Transmeta. Nothing came of those talks, and nothing has come out of the rumors linking IBM with Cyrix. Silicon Valley sources say that Advanced Micro Devices (nyse: AMD) had some preliminary talks with National but apparently new CEO Atiq Raza nixed the deal.
It is unfortunate that Cyrix is having such a tough time finding buyers, given that the company has worthy chip products coming down the pike. For example, three versions of the 0.18 micron M II chip--400, 433 and 466 MHz--are on cards and are likely to hit the shelves later in June. A mobile version of M II 433 is also likely to be offered this year.
Also on cards are new chips going by the code name Gobi, which combine the Cayenne core (an enhanced version of M II), a 256 K on-chip L2 cache, a Socket 370 interface and 3Dnow graphics support. The Gobi chips are expected to come to market in the third quarter 1999. Cyrix also plans to support a 133 MHz front side bus on Gobi, which is likely to put the chip on an even keel with Celeron chips.
These plans for fast chips will come to nothing unless Cyrix finds a new buyer, fast. |
