NATIONAL SEMICONDUCTOR TO EXPAND NETWORKING IN THE HOME

Company to Include Tut Systems' HomeRun Technology in New Line of Networking Chips

September 14, 1998 - National Semiconductor Corporation® today announced it has signed an agreement with Tut Systems to license Tut's HomeRun technology for use in its single-chip Ethernet physical layer transceiver solution for home networking. HomeRun technology allows consumers to link computers, and share peripherals and Internet access over existing home phone lines without interfering with normal telephone installation or services. With its next-generation PHYTER device, National will combine its Ethernet technology and Tut's 1Mbps HomeRun technology onto one chip, thus allowing PC and peripheral manufacturers to address both the home and Ethernet markets with one solution.

Today more than 40 million U.S. households own PCs, and analysts1 estimate that 15 million of these have multiple PCs. With this number expected to double by the year 2000, consumers are now looking for a simple way to network their multiple PCs together. Scheduled for production in the first half of 1999, National's PHYTER home-networking solution gives manufacturers greater flexibility in addressing this rapidly expanding market. PHYTER will be compliant with the first specification for low-cost networking using existing telephone wiring, expected to be published by the Home Phoneline Networking Alliance (HPNA) this quarter.

"National is committed to drive the future of communications," said Robert Penn, senior vice president and general manager of National's Communications and Consumer Group. "The inclusion of this new technology is a major step in our strategy to support the dramatic increase in TCP/IP traffic, whether within the home, over the Internet, or private networks."

Certainly this home-networking solution gives National another powerful tool to increase the viability of computing within the home, since resources can now be located where most convenient, and shared between users. "The companies' vision is to have a simple IP network within the home to interconnect low-cost Information Appliances, peripherals and Internet access devices," said Penn. "This agreement, our acquisition of ComCore for its revolutionary DSP technology, and our major investments in the development of Gigabit Ethernet are all critical elements in National's commitment to being a leader in the networking market today and in the future."

"Our HomeRun technology was designed from the outset to make it simple and cost effective for silicon providers to add a home networking capability to existing chip designs," said Sal D'Auria, president of Tut Systems. "National Semiconductor and its Cyrix subsidiary are pioneers in the networking and sub-$1,000 PC markets. Our HomeRun technology is a perfect complement to National's expertise in these areas. We are excited about the opportunity to work with National in expanding connectivity in the home."

National Semiconductor Corporation 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, Calif., 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.