National Semiconductor Corp., Santa Clara, Calif. has terminated the existing wafer manufacturing and marketing agreement between its Cyrix subsidiary and IBM Corp.
The announcement comes just weeks after National said it planned to block IBM from selling the Cyrix processors on the merchant market, but would still maintain its foundry agreement with Big Blue. (National To Block IBM From Selling Cyrix's X86 Processors).
According to today's announcement, IBM will cease the sale of Cyrix-designed processors before the end of calendar 1998, and National's Cyrix subsidiary will not longer be obligated to purchase wafers from IBM.
In addition, Cyrix will transfer certain assets to IBM. As a result of the termination and transfers, National will take a one-time charge of approximately $50 to $55 million in its
second quarter of fiscal 1999, which ends November 29, 1998.
Michael Bereziuk, National's senior vice president for worldwide
marketing and sales said that National plans to fulfill customer demand for Cyrix-designed IBM processors from its 8-inch, 0.25-micron wafer fab in South Portland,
In August, National said it expected to
begin volume shipments of Cyrix M II and
MediaGX microprocessors from its wafer fab
in South Portland, Maine, after starting up production on a 0.25-micron process technology sometime this month.
National managers said the
South Portland fab was expected to make the
majority of the company's Cyrix processors at
the end of the year, but expects to source 75% of its manufacturing volume in the fourth quarter from the Maine facility. (National Achieves "Unprecendented" Yields On Cyrix Chips).