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National starts making Cyrix chips

National Semiconductor has also begun producing the Cyrix-brand chips with the advanced 0.25-micron manufacturing process.

National Semiconductor has begun to ship samples of microprocessors based on the manufacturing standard currently employed for other cutting-edge PC processors, a technological step forward that will allow the company to catch up to competitors Intel and Advanced Micro Devices.

The shift also represents a way for National to stay competitive in an increasingly difficult pricing environment. In the future, National will be manufacturing more of its Cyrix-brand processors, rather than having third parties make them, which will reduce costs.

National announced that it has begun to produce Cyrix M II and MediaGX processors on the advanced 0.25-micron manufacturing process in its plant in South Portland, Maine, and will begin to ship production units based around the 0.25-micron process by September, said a spokesman.

The "0.25 micron manufacturing process" refers to the circuit width on a microprocessor. A reduction in the size of the lines allows the maker to pack more transistors into the same amount of real estate leading to more powerful chips. Both Intel and AMD are currently making the bulk of their processors on the 0.25-micron process. Cyrix still uses the older 0.35-micron process, said a National spokesman.

The manufacturing improvements come at a time when National/Cyrix are trying to re-estabilsh the company's position in the microprocessor world. Cyrix's MediaGX chip was the processor that helped kick off the sub-$1,000 computer revolution in 1997. In early 1998, however, Cyrix had difficulties in producing adequate volumes of speed upgrades to the chip. Compaq cut back on its use of Cyrix processors in favor of processors from AMD. The loss of some of its Compaq business contributed to financial losses for the company.

Since then, Cyrix has landed a deal to supply processors to Packard-Bell, but National is still struggling with financial issues. Recently, a drop in demand in other segments of its business lead to a quarterly loss and prompted National order employee furloughs.

The advance comes as National is shifting production of these chips from IBM to its own facilities. IBM acted as the main production facility for Cyrix when the company was independent. When National acquired Cyrix last spring, the combined companies announced that they would gradually transition manufacturing to National's plants. The motive to move comes from wanting to save costs. While IBM's fabrication plant is recognized as state of the art facility, it is also expensive.

"This is a significant step for National toward controlling our own destiny," said Brian Halla, National's CEO, in a prepared statement. "Now, we can focus all of our efforts on ramping capacity and bringing up new Cyrix-designed processors in our own fab. That should give customers significant advantages through dedicated manufacturing capacity, improved time-to-market, and cost savings."

Close to 75 percent of the volume of Cyrix chips are expected to emerge from National facilities by the end of the year.