NATIONAL SEMICONDUCTOR TO PUT PC ON A CHIP

April 6, 1998 – National Semiconductor Corporation® (NYSE: NSM) today announced it will put a PC system on a single chip by mid-1999. The chip would replace the dozen or more separate chips typically found in a PC today, dramatically lowering the cost for PC manufacturers and their customers, as well as improving performance.

"National has assembled, through acquisition and internal development, all the pieces it needs to integrate a PC on a single chip," said Brian Halla, National CEO, speaking today at the Semico Summit, a semiconductor industry conference in Phoenix, Ariz. "We have all the intellectual-property building blocks and the methodology to stitch them together onto a square of silicon less than half an inch wide.

"Integrating more and more functionality into smaller and smaller space is the story of electronics, from the vacuum tube to the transistor to the integrated circuit," said Halla. "A PC on a chip is the next logical step--the whole system goes on a chip."

National is already defining versions of the chip for major PC and information appliance manufacturers. Versions are in the works for both the desktop market, where it will give consumers smaller, quieter machines, and the notebook market, where the low power drain of the super-integrated chip will significantly extend battery life for portable users, Halla said. Other key features include high clock speed, built-in communications, and high-resolution graphics. With its greatly improved cost/performance, the chip is aimed at expanding the entry-level market that has grown so rapidly over the past year as full-featured, sub-$1,000 PCs from top-name manufacturers brought an end to the traditional dominance of the $2,000 price point in PC sales.

National's PC on a chip is being built around microprocessor cores developed by Cyrix, the processor company that merged with National in November, 1997. (An integrated Cyrix processor powered the first sub-$1,000 computer that Compaq introduced in February, 1997.)

PC Inside Information Appliances
National is developing other system chips to power a broad range of information appliances. "First the PC goes on a chip," said Halla, "Next, the PC becomes a plug-in behind the dashboard of your car, behind a flat-panel display in your kitchen, or inside a set-top box. The PC disappears just the way electric motors are invisible in our lives. We use them all day long, but we only think about the appliance, not the motor. Nobody knows how many RPMs drive their coffee grinder, and nobody will care how many megahertz power their DVD player."

National's approach to system-level integration employs on-chip distributed processing, in which different parts of the chip are optimized to perform specific functions such as multimedia or communications, as opposed to running every function through a single premium-priced processor. "Assigning the tasks to specialized engines is the smart way to provide great performance at a reasonable cost," said Halla.

Critical to the project is National's reusable cores methodology, which allows its design engineers to shorten time to market by drawing from a library of functional, or core, building blocks--such as processor, input/output, graphics, video decompression, power management, network, and audio--to create the final product. The cores are all designed to specifications that make them interchangeable, depending on customer requirements. For the first implementation, all the major PC functions except for memory and high-voltage parts of the power supply will be integrated on the chip.

Analog Integration
"National has a unique ability to take on the challenge of integrating analog functions with Cyrix's state-of-the-art digital technology," said Halla. "Our mixed-signal expertise gives us a tremendous advantage in optimizing system solutions." PC functions such as communications, display, audio, and timing involve analog circuits. An originator of analog chip technology in the 1960s, National has over 20 years of mixed-signal experience and over 2,400 patents.

The chips will be manufactured initially at National's brand new wafer fab in South Portland, Maine, on 0.25-micron process technology that can be further scaled down to 0.18 micron. The plant has a capacity of 30,000 wafers a month, which translates to tens of millions of chips per year. National can also draw on several foundry partners for additional capacity, including TSMC in Taiwan and IBM Microelectronics.

National has assigned the responsibility for coordinating its first PC on a chip to its design center in Herzlia, Israel, that for years has designed many of the peripheral chips that surround the processor on a typical PC motherboard. The center will draw on a company-wide team of design, architecture, test, software, cores, and marketing personnel contributing some 800 man-months of work.

In addition to Cyrix, other recent acquisitions that have provided technology for the PC on a chip are Gulbransen (January, 1998) for audio compression, FIS (November, 97) for graphics, Mediamatics (March, 1997) for MPEG video decompression, and PicoPower (August, 1996) for system logic.

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National Semiconductor Corporation, a Fortune 500 company, produces system-on-a-chip silicon solutions for the information highway, based on its leadership in analog and mixed signal technologies. National is headquartered in Santa Clara, California, and focuses on the communications, personal systems and consumer markets. National has annual sales of approximately $2.5 billion and 13,000 employees worldwide. Additional company and product information is available on the World Wide Web at www.national.com.