Interesting News out of National Semiconductor?
__National Semiconductor Bows Out Of PC Chip Biz__
National Semiconductor Corp., which bought Cyrix Corp. 18
months ago to stake a claim in the market for PC
microprocessors, has decided that competing with Intel in
the PC space is a losing proposition. National said
yesterday it will try to sell off that business, and plans
to eliminate 550 of its 11,500 workers, resulting in a $250
million to $300 million charge for its fourth quarter ending
May 30.
National will focus on supplying microprocessors, based on
Cyrix designs, for the emerging information appliances
market and maintain its business of designing analog chips,
CEO Brian Halla said in a conference call with analysts. The
microprocessors will go in thin-client computers, portable
Web devices, and set-top boxes. About 70% of National's
sales are analog chips, which are used in a variety of
products-- from fax machines and PC peripherals to
mainframes and aerospace products.
National had planned to pounce on the emerging market for
inexpensive PCs when it bought Cyrix, which had developed an
"integrated" chip that combines the functions of a
microprocessor with other support chips within the PC. Such
a configuration would reduce component costs, the vendor
reasoned. But Intel came out last year with its Celeron
chips and National was unable to compete with the chip
giant's market clout and economies of scale. Intel will soon
launch its own integrated chip, which would make it even
more difficult for National to compete in that market.
-- Tom Davey |
