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National Semi ships Geode for Net devices, set-top boxes

The chipmaker releases its second generation of Geode chips that integrate a processor, graphics, audio and other capabilities on a single piece of silicon.

Although the market for so-called information appliances is still in its infancy, National Semiconductor is already an old hat.

The Santa Clara, Calif.-based chipmaker today released its second generation of Geode chips that integrate a processor, graphics, audio and other capabilities on a single piece of silicon. Compaq Computer, America Online and 3Com are among the companies with product designs that already incorporate Geode chips.

The three new Geode chips are each targeted at a particular type of information appliance: thin client, set-top box or Web pad. The new chips are designed to keep National Semi competitive with Intel and Transmeta, both of which are also trying to grab a slice of the information appliance business. International Data Corp. predicts that sales of such appliances will grow to 89 million units by 2004.

National Semi has been at the forefront of the "system-on-a-chip" market for the past few years, with mixed results. In 1997, the company bought Cyrix, which owned a chip called the MediaGX. That chip combined a processor, graphics and other features.

Although the inexpensive MediaGX was at the heart of the first mainstream sub-$1,000 PC, price wars in the processor business, among other factors, led to financial losses. National Semi later sold Cyrix to Via Technologies but kept the MediaGX family.

MediaGX subsequently morphed into the Geode family. Sales of these chips have grown, but not in the direction some analysts predicted.

Geode chips now account for 10 percent of National Semi's sales. Instead of Geode sales coming largely from consumer-oriented Net appliances, however, a substantial portion of such sales come from business-oriented thin clients, which are Windows-based machines that access files and programs over a network instead of from a built-in hard disk.

National Semi has the lion's share of this niche market. Dell Computer, for example, uses a National Semi chip in its thin-client line, its only products that don't use Intel chips.

Although National Semi also has won spots in several product designs for consumer-oriented Net appliances, that market is still in its infancy. AOL has selected a set-top box containing a Geode chip for its AOLTV project, for example, although it decided on a Transmeta-based box for its Web pad.

By offering separate chips for each type of appliance, National Semi hopes to gain share in markets that are clearly still up for grabs. All three new Geode chips cost in the same range, less than $50 each in bulk. The set-top box and Web pad chips each use less than 2 watts of power in typical applications, National Semi said.

The Geode chips can deliver about 266 MHz in clock speed. That's far less than Intel's fastest laptop computer chips but enough for most Web surfers' needs, National Semi marketing director Camillo Martino said. However, Martino acknowledged that faster speeds will be needed as more people get broadband Internet access.

National Semi said that it plans to keep integrating more features onto a single chip.

"For right now, it hits the target," Martino said. "We are aggressively moving further down the integration path."

Down the road, Martino said, National Semi may look to integrate an Ethernet networking chip into its thin clients, include some type of wireless connectivity on its Web pad chip, and add more multimedia features into the set-top box chip.

With the new products, National Semi is taking a step back as far as integration goes. The earlier Geode also included MPEG video functions, but National Semi representatives said many customers wanted to put their own MPEG capabilities into products.

As the technology becomes more standard, Martino said National Semi will probably add MPEG functions back onto the Geode.