NATIONAL SEMICONDUCTOR FORESEES LOSSES FOR FIRST AND SECOND QUARTERS OF FISCAL 1999

Aug. 19, 1998 - National Semiconductor Corporation (NSM:NYSE) today announced that sales and earnings per share for the company's first quarter of fiscal 1999, ending August 30, 1998, and second fiscal quarter, ending November 29, 1998, may be below those of the recently completed fourth quarter of fiscal 1998. Losses per share, excluding the effects of one-time charges, in the fourth quarter were 42 cents on sales of $510 million. The company now expects sales for the first quarter to decline between 8 and 10 percent from the fourth quarter with a resulting larger loss.

Although new order rates for the current quarter indicate an improvement over the fourth quarter, shipments in the current quarter have been impacted by weakness in overall semiconductor demand, including the personal computer market. These lower shipments and the resulting lower capacity utilization of wafer fabrication facilities plus manufacturing transition costs for microprocessors are expected to increase first quarter losses.

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 first 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 10-K for the year ended May 31, 1998 (see the Outlook section of Management's Discussion and Analysis of Results of Operations and Financial Conditions).

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