National To Sell Off Cyrix To Via Technologies
By Doug Olenick -- TWICE, 7/1/1999
National Semiconductor last week reported it had signed a letter of intent for the Taiwanese firm Via Technologies to purchase National's Cyrix stand-alone X86 PC processor business for an undisclosed price.
Via officials said the company will market Cyrix-brand processors in the consumer market. National reported it wanted to sell its Cyrix business in early May citing it was unprofitable due to stiff competition from Intel and AMD.
The deal with National Semiconductor includes the transfer of Cyrix chip research and development and marketing but no microchip manufacturing capacity, although Via confirmed in a written release that it was among the bidders for National's CPU fabrication plant in South Portland, Maine.
Via's decision to keep Cyrix in the consumer market was welcomed by vendors who say they feel competition in the processor category will help the industry.
"If there is no Cyrix it will change some of the [market] dynamics because nobody else is ready to jump in," said Steve Smith, sales VP of Pionex, a major Cyrix customer, last month.
National has been selling its remaining stock of Cyrix processor at fire sale prices since it decided to drop out of the consumer market, according to AMD executives.
This had a negative effect on AMD, which predicted it will suffer a massive operating loss of about $200 million for its second quarter.
The company cited low industry prices and low shipments of its K6 level processors as the main reasons for the loss. AMD confirmed vendor reports that Intel has recently turned up the pricing pressure by offering Celeron processors at new low prices to grab share from AMD in the entry- and mid-range priced PC category.
This loss follows the $128.4 million net loss AMD suffered in the first quarter.
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