IBM will stop selling Cyrix-designed processors by the end of this year under terms of an agreement that severed a contract between IBM and National Semiconductor's Cyrix division.
Cyrix, which was acquired by National Semiconductor in November of last year, will transfer assets to IBM as part of the deal, although details regarding those assets were not provided in a written statement from National Semiconductor. The agreement releases Cyrix from its wafer purchase obligation to IBM.
As a result of the agreement, the chip maker will take a one-time charge of $US50 million to $55 million in its second quarter of fiscal 1999, which ends in November of this year.
Two months ago, National Semiconductor announced plans to furlough all of its employees to trim expenses during what was described then as a "tight" financial time. All 13,000 company employees were asked to take 10 days off for vacation or unpaid leave between Sept. 1 and Dec. 1.
The company announced plans to cut 1,400 jobs in April and in June reported a fourth-quarter loss of $212.4 million after a one-time restructuring charge.
In March, National Semiconductor blamed its financial difficulties on the Asian currency crisis and problems ramping up the Cyrix subsidiary.