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Chip does most PC chores
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July 15, 1999: 11:19 a.m. ET
National Semiconductor chip to be used on set-top boxes
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NEW YORK (CNNfn) - National Semiconductor Corp. Thursday unveiled technology that will take many of the major functions of a computer and integrate them onto one computer chip.
The chip, known as Geode SC1400, will be geared toward the information appliance market, such as set-top boxes -- for use in interactive television; thin clients - computers that have minimal memory and access software off of a network; and personal access devices.
National Semiconductor plans for the chip to hit the market by next summer, when it will be included on some set-top boxes.
National Semiconductor expects its current clients to pick up on the technology. Those clients include America Online Inc. along with Philips Electronics of the Netherlands and Asian hardware firms Acer Group and Legend Computer Systems Ltd.
Almost all in one
The Geode SC1400 will handle most of the main chores which are now scattered around a handful of different chips. Specifically, it will combine the processing, system logic and graphics functions.
When the company announced its plans for the technology in April 1998, it hadn't planned on some of the multimedia operations now popular. Because of that, it added MPEG video compression along with audio and other peripheral features.
Advances in the way chips are made are responsible for allowing companies to begin putting many more features onto one chip, according to Kevin Hause, consumer devices analyst at International Data Corp.
"One of the key factors in this growth is the integration of functionality into less silicon [the basic ingredient of chips], which both reduces cost and provides greater design flexibility," said Hause.
National Semiconductor is looking for something to revitalize its business. Last month it announced the sale of its Cyrix processor business to Taiwan's Via Technologies Inc. after losing a battle to challenge Intel's dominance in the higher speed chip business.
However, the Geode chip may not be a make or break for the company, according to Joseph Osha, semiconductor analyst at Merrill Lynch Global Securities.
"The impact on the bottom line is going to be minimal in the short term," said Osha. "It has large existing businesses in the analog and wireless markets already."
In its most recent earnings release, National Semiconductor posted a loss of $783.5 million, or $4.65 a diluted share, in the fourth-quarter ended May 30. That loss, however, included a $688 million charge related to its exit from Cyrix. Excluding that, losses were in line with expectations.
National Semiconductor's desire for an all-in-one type of chip is part of a general trend among chip firms to integrate more and more functions onto a single chip.
However, National Semiconductor (NSM) is not the only company to pursue this type of product, although it is more unique in that it is gunning for the personal appliance and thin client markets, an area on which market leader Intel (INTC) has not focused as much.
Still, the GeodeSC1400 chip's speed could help it get a leg up on competitors. "By standards of PC microprocessors, it's slow, but for appliances, it's fast," said Osha.
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National Semiconductor
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