This week's announced merger between National Semiconductor and Cyrix "fits like a glove," according to top executives of the two companies who spoke at the Robertson, Stephens Semiconductor conference.
Both companies have focused on system-on-a-chip products to cut system costs, but each has expertise in different parts of the chip, said James W. Swent, acting CEO of Cyrix. Brian Halla, chairman, president, and CEO of National, agreed, noting that Cyrix gives National the CPU core it needs to surround with National's I/O, power control, and other circuits.
"We got the center of the onion," Halla said.
The $550 million merger of the two semiconductor vendors was announced Monday.
Halla noted that National is a leading supplier of 10/100 Ethernet interface chips, Super I/O chips, PicoPower and core-logic chips for notebooks, and LM78 power control ICs. The company also markets embedded controller chips based on a 486 core and offers the device for Java applications such as network computers.
Cyrix gives National expertise in Pentium and Pentium II-generation processors with its 6x86MX product, and in integrated processors with the MediaGX line, Swent said. National provides pieces missing from Cyrix's resume: fabrication facilities, access to top-tier system OEMs, and a license for x86 processors, he said.
National gave Cyrix "the best place we could find for one-stop shopping," said Swent. With its own fab lines, Cyrix now will better be able to keep up with CPU leaders in processor speeds, instead of lagging by 50 MHz because of the time consumed getting designs ready for production at its foundry, IBM Microelectronics.
"This is going to put us right up into the race again," said Swent.
Cyrix's road map calls for higher speed and lower power 6x86 processors as the company shifts from 0.35- to 0.25-micron designs, said Swent. The MediaGX will be joined in this year's third quarter by the low-power MediaGXi and in the first half of next year by the MMX-enhanced MediaGXm, he said.
A target of National and Cyrix will be PCs under $1,000 -- and even under $500, the executives agreed. Halla noted that the sub-$1,000 PC did not exist last year, but by this March accounted for 22 percent of PCs shipped.
Although the target for low-priced PCs is the consumer, businesses will gain from these products in the form of NetPCs, Halla said. By integrating functions onto a single chip, National and Cyrix will allow PC OEMs to manufacture low-cost, network-ready systems that offer high performance processors, not obsolescent or low-speed CPUs, he said.
"The NetPC that will flood the desks will require integration," Halla said.
These PCs will feature x86 processors, not RISC processors such as the ARM or MIPS architectures, the executives agreed.
"The x86 architecture is going to become the ubiquitous device" for emerging products, Swent said. "That's the way Microsoft will drive it," Halla predicted.
Halla also predicted that the information appliance is going to displace the PC just as the PC is displacing the workstation, the workstation displaced the minicomputer, and the minicomputer displaced the mainframe.