Nat Semi cuts work force

Feb. 20, 2003 – Santa Clara, CA – National Semiconductor Corp. has unveiled a series of strategic profit-improvement actions that are designed to accelerate the company’s return on investments and streamline its cost structure. Among the announced actions is the reduction of its work force by 500 jobs.

Nat Semi is seeking to sell its information appliance unit, consisting primarily of the Geode family of products, as well as its cellular base band business. The company has engaged outside advisers to assist in the process. In the meantime, National will continue to operate these businesses and support customer programs.

“These businesses have an excellent future. But at this point, to achieve that future requires more capital than we are prepared to invest,” said Brian Halla, National’s chairman, president and CEO. “We have cast our nets far and wide, but in this challenging environment we are prioritizing R&D spending on product areas that drive higher returns sooner.”

Nat Semi has also entered into a new long-term technology and manufacturing agreement with Taiwan Semiconductor Manufacturing Corp. (TSMC). The strategic agreement establishes TSMC as National’s supplier of wafers for products with feature sizes at and below 0.15-micron.

“These are strategic actions specifically aimed at improving National’s performance and providing faster returns to our shareholders,” Halla said. “We are continuing to leverage our analog strengths in key growth markets, such as wireless handsets and FPDs, where our power management, RF, amplifier, audio, and display products continue to gain momentum and increase our dollar content/unit.”

In addition, the company will realign some manufacturing, product development, and support personnel as part of its overall plan to streamline National’s cost structure. This will immediately reduce approximately 500 positions from the company’s worldwide work force of 10,000.

From a financial perspective, the initial actions will result in savings of approximately $15 million/quarter starting in 4Q, which ends May 25.


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