National Semiconductor Corporation Spins Out Units To New Fairchild Subsidiary

June 20, 1996, SANTA CLARA, Calif. - National Semiconductor Corporation (NSM-NYSE) today announced that is has formed a new subsidiary organization consisting of its family logic, memory and discrete businesses, to be called Fairchild Semiconductor. It also named Kirk Pond, a National executive vice president, as president and chief executive officer of Fairchild.

"This new structure will unlock the value inherent in all the product lines of both companies by allowing each to be managed for optimum success," said Brian Halla, National's chairman, president and chief executive officer.

"National Semiconductor's strategy," Halla added, "is to focus on applications and products for moving and shaping information. The core of the strategy is excellence in designing, manufacturing and marketing analog and mixed signal products. Because of this, we feel it makes sense to separate out our family logic, memory and discrete businesses into this new subsidiary. In doing so, we will allow each entity to pursue a total business strategy tailored to its unique needs."

At the same time, National announced it will engage investment bankers to facilitate the identification of financing for the new Fairchild entity. In the most recent quarter, these product lines represented approximately 25% of total sales and were profitable as a group. National expects to take a pre-tax, one-time charge in the first quarter of fiscal 1997 in the range of $280 million to $320 million for the logic and memory businesses. This amount would be equivalent to an after-tax charge to earnings per share in the range of $1.58 to $1.79.

Kirk Pond, Fairchild's new CEO, said, "Fairchild intends to be a world leader in family logic, building on our large, loyal customer base for logic, as well as memory and discrete products. We chose to revive the Fairchild name, in fact, because of its strong heritage in logic. In creating this new structure, our primary consideration will be to maintain excellent support of our customers. To that end, we will be careful to ensure a smooth transition of sales and service channels from National to Fairchild. In the short term, we will be using National's worldwide sales and service channels while we formulate a transition plan, in concert with National and our customers."

National sites that will become part of Fairchild Semiconductor include the 4", 5" and 6" wafer fabrication plant in South Portland, Maine; the wafer fabrication plant in West Jordan, Utah; and the test and assembly plants in Cebu, the Philippines, and Penang, Malaysia.

Alan Markow
408 721-8103
Alan.Markow@nsc.com

Alan Bernheimer
408 721-8665
Alan Bernheimer@nsc.com

Jim Foltz
408 721-5693
invest.group@nsc.com