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National Semiconductor quits PC-chip business

National Semiconductor quits PC-chip business

Pointing to the financial beating it has taken over the past few quarters, National Semiconductor this week said it is getting out of the PC processor business.

The California-based company said it will quit manufacturing PC-socket-compatible microprocessors, but will keep and further develop its integrated processor line.

Its PC processor line included two separate lines of Intel-compatible x86 processors, one of which it acquired when it bought chip maker Cyrix in November of 1997. The integrated processor line which it will keep includes Cyrix's MediaGX multi-function graphics chip -- used in set-top boxes, thin-clients, thin-servers and portable Web devices -- as well as systems-on-a-chip, which integrate all the components of computer system on one piece of silicon. The latter, still under development, are to include graphics, video and communications functions, National Semiconductor said.

The company also plans to maintain its traditional analog processor business, and will continue to supply silicon to the PC motherboard market, as well as the company's family of SuperI/O peripheral products.

The move will also mean the loss of 550 jobs through early retirement, attrition and layoffs, including 165 job cuts in Singapore already announced in April, National Semiconductor said in its statement. This represents less than 5 per cent of its workforce.

As a result of the move, the company will take a one-time charge of between $US250 to $US300 million in its fiscal fourth quarter, which ends May 30. For its third quarter, which ended February 28, National Semiconductor reported a net loss of $US27.2 million, or 16 cents per share. The company expects to return to profitability in the second quarter of its next fiscal year, which ends November 28, 1999, according to the statement.

National Semiconductor also intends to sell a majority interest in its South Portland, Maine, wafer fabrication plant and is talking to potential partners.


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