NATIONAL SEMICONDUCTOR ANNOUNCES WORKFORCE REDUCTIONS AT ITS SOUTH PORTLAND, MAINE, AND WEST JORDAN, UTAH, FACILITIES

Additonal Spending for New Plant in Maine Will Bring Investment to $830 Million

July 18, 1996 -- National Semiconductor Corporation today announced a reduction in workforce of approximately 160 employees in South Portland, Maine, and 60 employees in West Jordan, Utah, in response to short-term softness in semiconductor demand.

National also announced an additional investment of $181 million in its new 200mm wafer fabrication plant under construction in South Portland, bringing its total investment to $830 million. The additional investment will add a .25 micron production line to the .35 micron line under construction, increasing the new plant's capacity by a third.

National will fill as many positions as possible in its new Maine wafer fabrication plant with employees affected by the layoffs there. "Because the new plant utilizes more advanced technology requiring a wide range of differing manufacturing skills," said National CEO Brian Halla, "the company is currently identifying potential candidates and developing training programs to maximize the number of employees transferred to the 200mm project.

"Early completion of the 200mm plant's construction and staffing will accelerate National's ability to achieve its strategic imperative of state-of-the-art, world class manufacturing," said Halla. The current 200mm project will provide 450 new jobs in South Portland, and the expansion announced today should provide another 100. To date, 107 employees have been hired on the project.

Under a restructuring announced June 20, the existing South Portland and West Jordan operations, together with plants in Penang, Malaysia, and Cebu, the Philippines, were spun out into a subsidiary division of National called Fairchild Semiconductor, headquartered in South Portland. The new 200mm wafer manufacturing plant under construction in Maine will be retained as a National facility. National also announced earlier it would take a restructuring charge, partly to cover the costs of workforce reductions.

"The restructuring will make both National and Fairchild more successful in the long run," said Halla. "but in the short term we need to face market realities. We will be announcing actions that will be taken in the United Kingdom next week, as well as reviewing the cost structures at other sites."

Employees affected by the reduction in the United States are being given 60-day notices, outplacement services, and severance packages (including benefits coverage) based on company service.

National Semiconductor Corporation provides technologies for moving and shaping information. The company focuses on four strategic markets: communications, personal systems, industrial, and consumer. National Semiconductor is headquartered in Santa Clara, California, and has 20,000 employees worldwide. In fiscal 1996, the company reported sales of $2.6 billion

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

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

Jim Foltz
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invest.group@nsc.com