NATIONAL SEMICONDUCTOR FORESEES LOSSES FOR FOURTH QUARTER FY98 AND FIRST QUARTER FY99.

May 14, 1998- National Semiconductor Corporation (NSM:NYSE) today announced that sales and earnings per share for the company's fourth fiscal quarter, ending May 31, 1998, and the first quarter of fiscal 1999, ending August 30, 1998, may be below analysts' expectations. The company now expects sales for the fourth quarter to decline by as much as 20 percent from the previous year's fourth quarter, resulting in an operating loss. The company also said that with current limited visibility of first quarter demand there is also the likelihood of an operating loss in that quarter.

Shipments in the current quarter have been slowed by inventory corrections in the personal computer market, with many customers slowing their factory build rates. While customers indicate that they expect to complete these inventory corrections in their June quarter, current order rates have not yet reflected that improvement. In addition to the PC inventory correction, product transition issues affecting the company's local area network business will continue into the summer and may not be completed until the launch of National's new 3.3-volt PHYTER-based products in the fall. Analog shipments have shown improvements, but not enough to offset other market uncertainties.

This outlook contains forward looking statements dependent on a number of risks and uncertainties including such factors as, but not restricted to, new orders received and shipped during the remainder of the fourth quarter, the timely ramp up of new submicron production facilities, the degree of factory utilization, the successful sale of existing inventories, and the ramp up of recently introduced products. Other risk factors are included in the company Form 10Q for the quarter ended March 1, 1997 (see the Outlook section of Management's Discussion and Analysis of Results of Operations and Financial Conditions).