National Semiconductor has struck a deal with Avanti
Corporation to purchase tools to manufacture system-on-a-chip processors,
the companies announced today.
National will purchase these tools in
an effort to expand its presence in the integrated chip market. By
replacing separate audio, video, graphics, and networking chips with one
integrated "system-on-a-chip," PC makers can significantly reduce their
manufacturing costs, enabling much lower priced
This market is expected to rapidly expand over the next few years,
following the growth in popularity of low-cost PCs and set-top Internet
appliances. It could rise to $1.6 billion by 2000, according to Mercury Research.
In fact, Intel executives said at Comdex
the company will develop integrated chips for low-cost PCs and set-top
boxes in the future.
National will purchase a suite of Avanti's Very Deep Sub-Micron tools,
(VDSM) in what is described as a "multi-million dollar deal." More specific
financial details were not disclosed.
National currently uses tools from Cadence in integrated chip
manufacturing, a relationship that will not be affected by the Avanti deal,
a National spokesman said.
"We're not giving those up, but Avanti's tools have features we like for
certain things," the spokesman said. "This will be used in next generation
stuff, which is probably still a year or two out."