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Low Graphics

Wednesday, May 5, 1999 Published at 17:26 GMT 18:26 UK


Then there were two: Intel, AMD

The market to produce processors for personal computers is now effectively left to two competitors: Marketleader Intel and Advanced Micro Devices (AMD).

The number three in the market, National Semiconductor Corporation (NSC) with its Cyrix processor, has thrown in the towel and announced that it will close its PC chip business.

Brian Halla, chairman, president and chief executive of NSC, said: "We will immediately cease slugging it out in the PC processor market, which has been dragging down our financial performance for several quarters."

A.A. LaFountain, analyst with Needham & Co., said: "It leads to the conclusion that we're in a two-horse race - Intel and AMD."

National said it would shed some 550 workers, through early retirement and lay-offs.

This is less than 5% of NSC's workforce worldwide.

NSC bought Cyrix Corporation in November 1997, and has since marketed two lines of x86 processors.

Smart chips

However, NSC will not leave the chip business altogether.

The company now wants to concentrate on "smart" processors for applications like interactive set-top boxes, thin-clients, thin-servers and portable Web devices.

It will retain the Cyrix brand for these products, offering its Cyrix MediaGX processor that will include graphics, video, and communication functions.

Wall Street reacted favourably to the news. NSC shares, which supplies chips to Compaq and General Motors for products ranging from cellphones to laptops, were up $1.31 at $16.06 in mid-morning trade.

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