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NATIONAL SEMICONDUCTOR TERMINATES CYRIX FOUNDRY AGREEMENT WITH IBM

Sep 25, 1998

Sept. 25, 1998-National Semiconductor Corporation? (NSM:NYSE) today announced it has reached agreement with IBM Corporation for termination of the existing wafer manufacturing and marketing agreement between National's Cyrix subsidiary and IBM.

Under terms of the agreement IBM will cease the sale of Cyrix-designed processors before the end of calendar 1998, and National's Cyrix subsidiary will be relieved of its wafer purchase obligation to IBM. In addition, Cyrix will transfer certain assets to IBM. As a result of the termination and transfers, National will take a one-time charge of approximately $50 to $55 million in its second quarter of fiscal 1999, which ends November 29, 1998.

"National will fulfill customer demand for Cyrix-designed IBM processors and ensure uninterrupted seamless support via our worldwide sales and support network and state-of-the-art 8-inch, 0.25-micron wafer fab in South Portland, Maine," said Michael Bereziuk, National's senior vice president for worldwide marketing and sales. "We appreciate IBM's support of Cyrix products to date and we look forward to other opportunities to work with IBM in the future," Bereziuk said.

National Semiconductor provides system-on-a-chip solutions for the information age. Combining real-world analog and state-of the-art digital technology, the company's chips lead many sectors of the personal computer, communications, and consumer markets. With headquarters in Santa Clara, California, National has annual sales of approximately $2.5 billion and 12,000 employees worldwide. Additional company and product information is available on the World Wide Web at www.national.com.

IBM is the world's largest technology company.