NATIONAL ANNOUNCES REVISED EARNINGS FOR SECOND AND THIRD FISCAL QUARTERS

May 29, 1997 -- National Semiconductor Corporation® (NYSE:NSM) today announced that it has revised its net income for the second and third quarters of fiscal year 1997 in response to a Securities and Exchange Commission review of the company's spin-off of its Fairchild businesses. The effect of the revision is to increase previously reported gross margins and net income for the second and third quarters. Full year earnings through the fourth quarter will not be affected.

As previously announced, National took a $206 million restructuring reserve in the first quarter of fiscal 1997 which represented the estimated impairment of Fairchild "Long-Lived Assets" as defined by FAS 121. National completed the sale of the Fairchild businesses and assets on March 11, 1997, after announcement of the company's third quarter results on March 6. In response to the SEC review, National will now recognize $192 million in recovery of Fairchild restructuring reserves in the third quarter and $9 million in the fourth quarter of fiscal 1997 instead of $201 million in the fourth quarter as previously announced. In addition, because National took a conservative approach by continuing to depreciate the Fairchild assets while they were being held for sale, the company will now reverse that depreciation expense, resulting in a $17 million increase in gross margin and pre-tax earnings in both the second and third quarters, and a $3 million increase in the fourth quarter. An additional $10 million credit for other Fairchild reserve recoveries will be recorded in the third quarter. The company will also recognize a $40 million gain on the sale of Fairchild in the fourth quarter of fiscal 1997.

After the recognition of the revisions related to the sale of Fairchild, National's fully diluted earnings per share were 30 cents versus a previously reported 21 cents in the second quarter, and $1.39 versus a previously reported 30 cents in the third quarter. Earnings per share, excluding the reversal of the restructuring reserve, were 43 cents in the third quarter of fiscal 1997.

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NATIONAL SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Revised)
(in millions, except per share amounts)

                Second Quarter  Third Quarter  Third Quarter
                     Three Months      Three Months      Nine Months
                        Ended             Ended             Ended
                  -----------------  ---------------   ---------------
                    Nov. 24, 1996     Feb. 23, 1997     Feb. 23, 1997

As Reported:
Gross Margin           $230.8           $255.3             $658.3
Gross Margin %           34.9%            37.5%              34.5%

Restructuring             0                0               $256.3

Net Income (loss)       $29.5            $42.8            ($135.3)
Earnings (loss)         $  .21           $  .30              ($.97)
  per share



As Revised:
Gross Margin           $248.1            $282.4            $702.7
Gross Margin %           37.5%             41.5%             36.8%

Restructuring             0             $(192.0)            $64.3

Net Income              $42.5           $ 207.1             $42.0
Earnings per share      $  .30          $   1.39            $  .30