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What Might Have Been at National Semi
Shed a tear, maybe, and say goodbye to what was once a source of real innovation in the PC business, as National Semiconductor (NSM:NYSE) yesterday announced it's finally bailing on the PC microprocessor market. Its expensive purchase of Cyrix in mid-1997 was its final lunge at success in PC chips. Cyrix has done fairly well at the bottom of the personal computer CPU market, and low-end boxmakers Microworkz, eMachines and Packard Bell will have to scramble to find replacements for the Cyrix chips in their current bottom-of-the-bottom-of-the-line machines.
But they won't have to look far: What finally squeezed the life out of the Cyrix line was Intel's (INTC:Nasdaq) aggressive marketing of its Celeron chips, plus AMD's (AMD:NYSE) success with its K6 series.
Those of us with long memories and longer histories in this business recall National Semi fondly for its early failures -- I'm not being sarcastic -- in the PC CPU business. It is not an accident of history that Intel won that war -- Intel brought focus, intensity, speed and the willingness to gamble to bear upon what at the time did not look remotely like today's huge, rich personal computer market. But if history were written on the basis of technical innovation, National Semi's 32032 chip would have been one of the big, big winners. When Intel was fooling around with such dead-end products as the 80286, National was jumping way ahead with more far-seeing, more innovative products.
Then again, history is written by the winners, and National Semi was never able to persuade an ever-cautious, me-too PC-clone industry that technological superiority was a step toward market success. National became, along with AMD, a classic heartbreaker for technology investors.
So National bails on PC CPUs, shuts down Cyrix, and puts the name, intellectual property and its South Portland, Maine, high-tech chip fab up for sale. Sooner or later you've gotta face the music and stop losing money, and from an investor's standpoint, this is a very positive step.
But there's still a tear or two for those burdened by memories of what might have been.
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