Nat Semi orders staff furloughs

National Semiconductor will furlough all of its workers for ten days sometime between September and November, as the chipmaker continues its yearlong struggle with weak demand.

All of National's 13,000 workers worldwide will take ten-day leaves during the fall, a spokesman said today. The company plans to allow employees to take the time off as paid vacation or unpaid leave.

In addition to slack demand caused in part by Asian economic decline, National has faced increased competition from Advanced Micro Devices. PC makers Compaq Computer, IBM, and Hewlett-Packard have increasingly been choosing the company's K6 processors for low-cost models, such that AMD now claims about half of the low-cost market.

Inexpensive Celeron chips from Intel have also been making inroads into a category that National subsidiary Cyrix practically invented. (Intel is an investor in CNET: The Computer Network.)

National's woes seemingly began with the loss of a lucrative desktop PC deal with Compaq late last year. Cyrix's inability to produce enough of its 233-MHz MediaGX chip caused Compaq to look elsewhere.

National is not the only chipmaker to suspend operations this year. Intel shut down two manufacturing plants for nine days around the July 4 holiday, a rare stoppage for the processor giant. Along with a gradual, ongoing reduction of some 3,000 employees, the move was part of its effort to reduce supply.

National had previously laid off some 1,400 employees in April and May, again to reduce supply.