NATIONAL SEMICONDUCTOR FIRST QUARTER REVENUES UP 26% WITH 35% GROWTH IN ANALOG AND MIXED SIGNAL SALES

SANTA CLARA, CA, September 6, 1995 -- National Semiconductor Corporation (NYSE:NSM) today reported first quarter revenues of $698.8 million, a 26 % increase over the comparable quarter last year. Sales of analog and mixed signal products, the core of National's focus on markets for moving and shaping information, grew by 35 % in the quarter.

Net income for the quarter ended August 27, 1995 grew 25 % to $73.5 million, or 53 cents per share (fully diluted), up from $59.0 million, or 42 cents per share (fully diluted) for the comparable quarter a year ago.

Analog and mixed signal products made up 59.4 % of total sales for the quarter, compared with 55.5 % for the first quarter last year, as the company continued to invest 72 % of its total research and development spending in these products.

Summary of results:
First quarter ended:          August 27, 1995           August 28, 1994
--------------------------------------------------------------------------
Net Sales                             $698.8                    $553.8
Net Income                              73.5                      59.0
Earnings per share (fully diluted)       0.53*                     0.42*
(All figures in millions of dollars, except per share 
amounts)

"Our first quarter results clearly indicate that our analog and mixed signal focus is now providing revenue growth ," said Gilbert F. Amelio, chairman, president and chief executive officer. "Our order pattern and strong backlog in our analog and mixed signal businesses position us well as we enter the second quarter."

Companywide gross margin improved to 43.1 %, as sales continued to shift toward analog and mixed signal products, which have gross margins in excess of 50 %. The company increased wafer fab capacity by 24 % year-to-year, but capacity utilization remained at 92 % due to increased demand. Other income from intellectual property and gains on the sale of investments grew slightly, and the tax rate increased to 25 % from last year's 20 %.

"New order rates were up 25 % over the first quarter of last year, led by a 35 % increase in bookings for analog and mixed signal products," Amelio added, "despite our predicted summer adjustment from the unusually high booking rates of the spring quarter. We expect to see the normal seasonal pick up in bookings this fall," he said.

Bookings for analog and mixed signal products showed particular strength in audio products, monitors, analog telecommunications, digital wireless communications and personal computer products. Bipolar logic orders were down from their unusually strong levels in the fourth quarter of fiscal 1995 and flat with last year.

On a regional basis, North American orders were down seasonally but grew over the previous year in step with the worldwide growth. Orders in Japan actually grew compared with the fourth quarter of fiscal 1995 and grew twice as fast as the overall company rate compared with last year. European orders were down seasonally, but also grew faster than the overall rate. Bookings from the Asia-Pacific area showed the most seasonality and were flat compared with the first quarter of last year, due to limited availability of multimarket products for spot markets.

During the quarter National announced a $300-million expansion of its Arlington, Texas, wafer fabrication plant as well as plans to build a new $600-million 8-inch wafer facility at its existing manufacturing site in South Portland, Maine. These expansions are part of the company's recent commitments to invest more than $1.3 billion over the next several years in new state-of-the-art manufacturing facilities to support future growth. Earlier this year National began work on a new 8-inch wafer line in its Fairchild Research Center in Santa Clara, California and recently launched a new long range research and development program there to focus on future product applications of semiconductor technologies.

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