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To: Paul Engel who wrote (26847)	5/23/1998 1:38:00 AM
From: Craig Freeman	Read Replies (2) \| Respond to of 33344

Paul, "A couple of years from now and today's price will look really cheap." A couple of years from now, YOU will look really cheap. But that was a given. Not to mention your poor use of the language. PS Please remind me when and if Intel once again hits $85 .. the point at which we agreed to disagree. As of today, your point is about $10 short.

To: Paul Engel who wrote (26847)	5/23/1998 9:07:00 AM
From: Scumbria	Read Replies (1) \| Respond to of 33344

RE:"A couple of years from now and today's price will look really cheap." Paul, In a couple of years National's PCOAC will be slashing away at Intel's bottom line. The only businesses Intel will be competitive in at that time are MP servers, workstations and lousy TV commercials. You really should try to deal with reality here. The days of large profit margins in the CPU/motherboard business are going, going ..... Scumbria

To: Paul Engel who wrote (26847)	5/23/1998 2:26:00 PM
From: Xpiderman	Respond to of 33344

Trouble At National Semi Trouble At National Semi By Lewis H. Young and Jim DeTar, Electronic News. Santa Clara, Calif.--The wheels are falling off Brian Halla's turnaround at National Semiconductor Corp. Last week the company warned investors that revenues would fall below analysts' most recent forecasts, a loss in the current quarter ending on May 31, and a possible loss in the next quarter. It was the fourth financial warning the company has issued in the past four months. Much of the problem is rooted in the Cyrix subsidiary, which reported continuing problems producing its microprocessor chip. Trying to correct the problems, Mr. Halla is said to have refocused the company's research and marketing budgets so that as much as 70 percent of the funds are going to Cyrix, starving the analog and communication chip businesses. According to insiders, the reduction in funds has created dissatisfaction and unhappiness among staff members at those businesses. One rumor had the wireless group asking the company to spin it off as a separate company. National offered a litany of excuses for its disappointing performance: production difficulties at Cyrix, a slowdown in PC sales because of inventories at manufacturers, the impact of the Asian economic crisis on sales of chips used in cellular phones and the shift to under $1,000 PCs which hurt sales of components to mid- and high-priced PCs. But some of National's problems were self-inflicted. A couple of years ago, the company had a virtual lock on the chips for the LAN market. But the head of the business used the company's dominant market share to raise the price of the chips. 3Com asked LSI Logic to develop an ASIC for it to do the same thing at a much lower price. With its new chip, 3Com became the dominant supplier of LAN chips and National is abandoning the market. Initially, Mr. Halla acquired Cyrix to get microprocessor technology for embedded systems. His plan was to sell the microprocessor chips to get cash flow until there was a major industry shift to the use of embedded microprocessors. But trying to solve the problems in making the discrete microprocessors has made National lose sight of its strategic goal. Mr. Halla may have a shortened time to fix the troubles. Rumors circulated in Silicon Valley that Charles Sporck, National's long-time former CEO and still a major influence at the company, was losing patience with Mr. Halla's strategy. One factor that may affect National's future significantly is its manufacturing capacity. National has limited capacity at its own facilities in Portland, Maine and Santa Clara, Calif. and has contracted with the new foundry powerhouse, IBM, to make its Cyrix 6x86MX processors. However, Cyrix may have to compete for foundry space against x86 market rivals Advanced Micro Devices (AMD) and Integrated Device Technology (IDT), which are also both using IBM as a foundry (EN, The Antenna, March 23). National bettered its position in the market slightly when it settled a patent dispute with Intel earlier this year (EN, Feb. 9) heading off what could have been a costly legal battle at a time when both companies' sales had gone flat. Under terms of the new patent cross-license agreement with Intel, National gained access to Intel's Slot 1 interface patent, dubbed the P6, that connects the Pentium II chip module to a PC's motherboard. Until that time, Intel had not licensed or granted access to the interface to its competitors. The settlement of the dispute between the semiconductor giants--that began last year when National's Cyrix unit filed a patent infringement lawsuit (EN, May 19, 1997)--calls for an extension of the previous cross-license patent agreement between the two companies that dates back to 1976, as well as dismissal of the Cyrix case. National is not the only company with financial difficulties, although its troubles may prove to be a major hurdle to its hoped-for recovery and raise questions about Mr. Halla's future at the company. When Intel first reported in early spring that its 1Q98 revenues would be below previous estimates (EN, March 9) it was a surprise to the market which knocked Intel's shares down by about 10 percent. Other semiconductor companies also have reported disappointing and declining earnings as the industry continues to grapple with the ongoing Asian financial crisis and the lower margins that accompany the market move to sub-$1,000 and lower PCs.