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To: greenspirit who wrote (47860)	2/15/1998 1:26:00 PM
From: greenspirit	Read Replies (2) \| Respond to of 186894

Thread, Article...National in no hurry to clone Pentium chips... Feb, 10 1998 YVONNE CHAN National Semiconductor has no immediate plans to produce Pentium II clones despite the patent infringement lawsuit it recently settled with Intel, a company executive says. Chips by National subsidiary Cyrix are based on the traditional design called Socket 7 and aimed at the sub-US$1,000 PC market. They were "the most cost-effective for the mid-range to low-range [market segment]", said Martin Kidgell, National's Asia-Pacific managing director. For that reason, National would "continue to propagate Socket 7", he said. The patent settlement allows Cyrix to produce clones of the Pentium II, Intel's latest chip that had threatened to shut other chip-makers out of the market by incorporating a radical and closely guarded new design. Cyrix claimed and was granted the rights to Intel patents through National's 22-year licensing agreement with Intel. However, the fast-growing market for the sub-$1,000 PC has supported demand for low-cost Socket 7 chips. Cyrix recently said it would supply chips for Compaq in the growing market of sub-$2,000 laptops. National, which purchased Cyrix last year, plans to start mass-producing Cyrix chips at its Maine plant by mid-year. Previously, Cyrix relied on outside manufacturers to make its microprocessors. Its dependence on different companies for manufacture meant that Cyrix could use only generic designs, putting it at a disadvantage against rival chip-makers Advanced Micro Devices and Intel. Cyrix has had problems producing chips to meet demand. In a recent earnings announcement, National said its third-quarter results would be lower than expected due, in part, to Cyrix's production problems. The company had fallen behind rivals in releasing high-speed chips, Mr Kidgell said. "We have not had them out as quick as our competitors." National, which plans to make 10 million Cyrix chips this year, was bringing in fabrication equipment from IBM and would consider outsourcing some chip production to the Taiwan Semiconductor Manufacturing Co. National had cited weak sales in Asia as another reason for its earnings warning. The financially troubled region accounts for 24 per cent of the company's worldwide revenue. There was a drop in deliveries for many of the company's products in South Korea, and a regional slowdown in sales for National's analogue devices. National expected shipments to increase in the fourth quarter as inventories are reduced. The company is optimistic of increased business in China and sees the emerging sub-$500 PC market as a source of potential growth. In the past two years, National has bought a range of companies to lend technology to its "system on a chip", a chip that would integrate multiple functions such as graphics, sound, modem, and network card. Such a chip would enable, for example, a PalmPilot to have a wireless Internet connection, Mr Kidgell said. National was designing custom chips for other companies, which Mr Kidgell declined to name. ______________________________________________________________________ Could National be having some difficulty focusing on a coherent strategy? Michael