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To: GVTucker who wrote (80442)	5/5/1999 5:38:00 PM
From: GP Kavanaugh	Read Replies (1) \| Respond to of 186894

Here's the Dow Jones take on it. Much Humbled National Semi Says Fighting Intel Proved Costly By Mark Boslet PALO ALTO, Calif., (Dow Jones)--National Semiconductor Corp. (NSM) is a much humbled company. Only a 1 1/2 years after purchasing chip-maker Cyrix Corp. for $528 million, National is ridding itself of most of Cyrix's operations and admitting that competition with market leader Intel Corp. (INTC) proved too bloody. That means backing away from bold plans to transform the PC business by producing one low-cost chip to do what multiple chips do today. National Chief Executive Brian Halla had spent countless hours evangelizing the chip and projecting an era of $300 and $400 PCs. But instead of reshaping the business, National's PC operations ran up losses that some analysts believe reached to $80 million a quarter. The company's PC microprocessor business continued to lose share to more aggressive rivals Advanced Micro Devices Inc. (AMD) and Intel, while an under utilized South Portland, Ma., foundry couldn't pay for itself. The market is "so controlled by Intel (that) it doesn't make sense for someone like National to go up against them," Halla told Dow Jones. "It's costing us a fortune" to stay in the low-end PC business. National announced today that it would sell its M2 processor for Intel-compatible computers and the majority interest in the foundry. Last October, National had unveiled plans to shut down part of its Greenock, Scotland, chipmaking plant and sell the rest. Many analysts think National should be able to find a buyer for both properties, and Halla said he is already talking with several propective purchasers, which he declined to identify. Rumors began circulating more than a week ago that International Business Machines Corp. (IBM) was interested in the Cyrix operations, but sources close to Big Blue said it is not. An IBM spokesman declined comment. A more likely buyer for the founder is the Asian chip maker, Taiwan Semiconductor Manufacturing Co., with which National has had a business rapport for several years, analysts say. A buyer for the M2 chip could also come from Asia or from Europe, these analysts said. National's decision to sell its PC business "is certainly not a bad idea," said BancBoston Robertson Stephens analyst Arun Veerappan, who raised his rating on the company to buy from hold after hearing the news. Veerappan said the company received about $50 million in quarterly revenue from the M2 chip and incurred $40 million in quarterly losses. Quarterly losses at the plant are between $35 million to $40 million, he said. These financial pressures on its business were evident. After posting a loss in fiscal 1998 and through the first three quarters of fiscal 1999, National in March gave a bearish outlook for its fiscal fourth quarter ending in May, citing uncertainties in PC chip sales. The problem is the company's vision for PC market didn't translate into improved sales. This is in large part because National didn't have the chip design or production techniques to keep up with deep-pocketed Intel, or even AMD. AMD has struggled with production itself but has a well design chip it obtained through its purchase of Nexgen Inc. For instance, while Intel's had 80.3% of the worldwide Intel-compatible market in the first quarter of 1999 and AMD held onto 13.6%, Cyrix had only 5.4%, down slightly from the fourth quarter, according to Mercury Research. Difficulties were greater in the large U.S. retail market, where Cyrix's share of the desktop market fell from 15.8% in Jaunary to 7% in March, PC Data said. "We have been lagging behind in (chip) speed," said Halla, who nevertheless pointed out the company is currently producing a more competivie M2 433. (MORE) Dow Jones Newswires 05-05-99 2129GMT (AP-DJ-05-05-99 2129GMT) GP

To: GVTucker who wrote (80442)	5/5/1999 8:07:00 PM
From: Amy J	Respond to of 186894

NSM to "Intensify Focus on Information Appliance and Analog Businesses" Thanks GVTucker, bloomberg.com SANTA CLARA, Calif.--(BUSINESS WIRE)--May 5, 1999--National Semiconductor Corporation(R) (NYSE:NSM) today announced its intention to exit the PC processor business in order to sharpen the company's focus on the emerging information appliance market and on its traditional analog business. Since its acquisition of Cyrix Corporation in November 1997 National has marketed two lines of x86 processors. National will exit its PC-socket-compatible microprocessor line. National will retain and reinforce its integrated processor line, including the Cyrix MediaGX(TM) that is being widely adopted in such information appliances as interactive set-top boxes, thin-clients, thin-servers and portable Web devices. National's processor roadmap for this market extends from the MediaGX through fully integrated system-on-a-chip versions that will include graphics, video, and communication functions.