InformationWeek

August 11, 1997

NatSemi Purchase Boosts Cyrix

Chipmaker to target NetPCs, handheld devices, and entry-level PCs

yrix Corp. has never been able to mount a serious threat to Intel. But the x86-clone manufacturer may find a new role in providing IT shops with thin clients based on its chips following its recent purchase by National Semiconductor Corp.

Cyrix plans to target the NetPC market, as well as handheld devices and entry-level PC desktops. With National Semiconductor's backing, the merged company expects to begin cranking out tens of millions of Cyrix's MediaGX processors next year at a new chip fabrication plant in South Portland, Maine. The MediaGX integrates graphics and audio capabilities into one chipset, eliminating the expense of adding extr a chips and circuit boards to a low-end PC.

National Semiconductor and Cyrix also are partners on a "joint reference platform" for a NetPC that will be a blueprint for building devices in the $500 range. The platform will be available later this year; a typical unit, available in 1998, will include a 166-MHz multimedia CPU, 8 Mbytes of DRAM, an Ethernet adapter, 64-bit graphics, audio, a keyboard, a mouse, and Windows NT with a desktop-management interface.

But industry observers are uncertain of the demand for such units. "They're going into completely unexplored territory as to how the market is going to develop," says Dean McCarron, a principal at Mercury Research in Scottsdale, Ariz. But McCarron sees a broad demand for other devices using Cyrix chips, such as cellular phones with x86 processors.

Although Cyrix has offered customers an alternative to CPUs from Intel, the Richardson, Texas, company has had to lease costly manufacturing capacity from other companies, such as IBM Microelec- troni cs. Because such relationships limit the flexibility and increase the cost of manufacturing chips, many PC companies have avoided using Cyrix processors. Intel's marketing clout has also been an obvious inhibitor.

"We didn't have our own fabrication plant, and we lacked product breadth," says Steve Tobak, Cyrix's VP of corporate marketing. "This relationship resolves those issues."

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