To ALL: Article...National Semiconductor CEO speaks about merger...
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National Semi Plots Move Into Low-Cost PCs
By ANTHONY EFFINGER
c.1997 Bloomberg News
SAN FRANCISCO -- National Semiconductor Corp. Chief Executive Brian Halla said buying fellow chipmaker Cyrix Corp. will fuel his company's drive into the market for very inexpensive personal computers.
Selling PCs with price tags below $1,000 will be a key business for National. Eventually, the company will push on to make even cheaper machines, Halla said.
``We want the information appliance business,'' Halla said at the Robertson Stephens semiconductor conference. ``We're on a roll and the afterburners just kicked in'' with Cyrix.
Halla used the presentation to explain to investors why his company did something as unpredictable as buying Cyrix, which caught many analysts by surprise.
National is one of many companies working on cheaper machines that use the vast resources on the Internet to compensate for costly computing power. Some of the machines are designed to do little more than provide access to the World Wide Web.
Low-cost PCs will be popular among lower-income families and among wealthier people who want a second machine just for getting information off the Internet, Halla said. PCs that cost less than $1,000 already account for more than 20 percent of sales, though the products just came on the market this year, Halla said.
By focusing on the low-price PC market, one that has been ignored by bigger companies, National will avoid competing directly with Intel Corp., the world's largest chipmaker, Halla said.
Buying Cyrix for $550 million gives National the chips that power new, low-price PCs being marketed by Compaq Computer Corp. Cyrix also makes microprocessors that compete with Intel's, though it's struggled to find enough customers.
Cyrix will give National an advantage when PCs are ``displaced from down under'' by lower-cost PCs and information appliances, which Halla said is certain to happen.
Cyrix's microprocessor technology also gives National one of the key pieces it needs to complete its ``system-on-a-chip'' plan to make single chips that control an entire electronic device. Putting all the processing capabilities on one chip cuts costs and saves space, which is key as information devices get smaller.
One of Halla's goals is to combine all the equipment that surrounds a television -- set-top boxes, digital video disk players and World Wide Web browsers -- into one unit. He hopes to do that with system-on-a-chip technology.
Asked if National could make such a powerful chip without losing money, Halla cited LSI Logic Corp.'s success in making a single chip to run the Sony PlayStation video game.
With Cyrix ``we've got all the pieces,'' Halla said.
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Regards, Michael |
