National Semiconductor ( ) is a
semiconductor manufacturer, specializing in
analog devices and
subsystems,
headquartered in Santa
Clara
, California
, USA
. The
products of National Semiconductor include power management
circuits, display drivers, audio and
operational amplifiers, communication
interface products and data conversion solutions. National's key
markets include wireless handsets, displays and a variety of broad
electronics markets, including medical, automotive, industrial, and
test and measurement applications.
History
Founding
National
Semiconductor was founded in Danbury, Connecticut
by Dr. Bernard J Rothlein on May 27, 1959, when he
and seven colleagues had left their employment at the semiconductor
division of Sperry Rand
Corporation.
The founding of the new company was followed by Sperry Rand filing
a lawsuit against National Semiconductor for patent infringement.
By 1965, as it was reaching the courts, the preliminaries of the
lawsuit had caused the stock value of National to be depressed. The
depressed stock values allowed Peter J Sprague to invest heavily in
the company with Sprague's family funds. Sprague also relied on
further financial backing from a pair of west coast investment
firms and a New York underwriter to take control as the Chairman of
National Semiconductor. At that time Sprague was 27 years old.
Jeffrey S Young characterised the era as the beginning of
venture capitalism.
That same year National Semiconductor acquired Molectro. Molectro
was founded in 1962, in Santa Clara, California by J. Nall and D.
Spittlehouse, who were formerly employed at
Fairchild Camera and
Instrument Corporation. The acquisition also brought to
National Semiconductor two experts in linear semiconductor
technologies, Dave Talbert and Robert Widlar (
Bob Widlar), who were also formerly employed at
Fairchild. The acquisition of Molectro provided National with the
technology to launch itself in the fabrication and manufacture of
monolithic integrated circuits.
In 1967 Sprague hired five top executives away from Fairchild,
among whom were Charles E Sporck and Pierre Lamond. At the time of
Sporck's hiring,
Robert Noyce was
defacto head of semiconductor operations at Fairchild and Sporck
was his operations manager.
Charles E Sporck was appointed President and CEO of National. To
sweeten the deal for Sporck's hiring and appointment for half his
former salary at Fairchild, Sporck was alloted a substantial share
of National's stock. In essence, Sporck took four of his personnel
from Fairchild with him as well as three others from TI,
Perkin-Elmer and Hewlett Packard to form a new eight man team at
National Semiconductor. Incidentally, Sporck had been Widlar's
superior at Fairchild before Widlar left Fairchild to join Molectro
due to a compensation dispute with Sporck.
In 1968,
National shifted its headquarters from Danbury, Connecticut to
Santa Clara,
California. However, not unlike many companies, for
legal and financial expediency, National retained its registration
as a
Delaware
corporation.
Over the years they acquired several companies like
Fairchild Semiconductor (in
1987), and
Cyrix (in
1997).
However, over time National Semiconductor spun off these
acquisitions. Fairchild Semiconductor became a separate company
again in 1997, the Cyrix microprocessors division was sold to
VIA Technologies of Taiwan in
1999.
From 1997 to 2002 National enjoyed a large amount of publicity and
awards with the development of the Cyrix Media Center, Cyrix
WebPad, WebPad Metro and National Origami PDA concept devices
created by National's
Conceptual Products Group. Based
largely on the success of the WebPad National formed the
Information Appliance division (highly integrated processors &
"internet gadgets") in 1998. The Information Appliance Division was
sold to AMD in 2002.
Other business like digital wireless chipsets, image sensors, PC
I/O chipsets have also been recently closed down or sold off as
National has reincarnated itself as a high performance analog
semiconductor company.
The transformation of National Semiconductor
Peter Sprague, Pierre Lamond and the affectionately called Charlie
Sporck worked hand-in-hand, and with support of the board of
directors, to transform the company into a multinational and
world-class semiconductor concern. Immediately after becoming CEO,
Sporck started an historic price war among semiconductor companies,
which then trimmed the number of competitors in the field. Among
the casualties to exit the semiconductor business were General
Electric and Westinghouse.
Cost control, overhead reduction and a focus on profits implemented
by Sporck was the key element to National surviving the price war
and subsequently in 1981 becoming the first semiconductor company
to reach the US$1 billion annual sales mark. However, the
foundation that made National successful was its expertise in
analogue electronics, TTL
(
transistor–transistor
logic) and
MOSFET
(metal-oxide-semiconductor field-effect transistor)
integrated circuit technologies. As they
had while employed in Fairchild - Sporck and Lamond directed
National Semiconductor towards the growing industrial and
commercial markets and to rely less on military and aerospace
contracts. Those decisions coupled with inflationary growth in use
of computers provided the market for the expansion of National.
Meanwhile, sources of funds associated with Sprague coupled with
creative structuring of cash flow buffering due to Sporck and
Lamond provided the financing required for that expansion. Lamond
and Sporck had also managed to attract and extract substantial
funds to finance the expansion.
Among Sporck's cost control efforts was his attraction towards
low-cost labour and outsourcing of labour. National Semiconductor
was among the pioneers in the semiconductor industry to invest in
facilities to perform final manufacturing operations of integrated
circuits in developing countries, especially in Southeast
Asia.
National Semiconductor's manufacturing improvements under Sporck
(in collaboration with Lamond) had not been enabled by emphasis on
process innovation but on improving and standardising processes
already established by other companies like Fairchild and Texas
Instruments. As well as, by frequent raiding to hire from
Fairchild's pool of talents.
Sporck and Lamond directed the company towards exploiting the
growing commercial and industrial applications market, thus
lessening dependence on competing for military and aerospace
contracts.
Weaknesses of Sporck's leadership
National Semiconductor under Sporck was not particularly invested
in marketing strategies, even though it had the vision to launch
itself into new and apparent opportunities in the consumer market.
Sporck had applied strategies that made National Semiconductor
function as a low-cost mass manufacturer of semiconductor
commodities.
It seems that companies like Sony of Japan and Swatch of
Switzerland understood that the consumer market is much less a
commodities market where low cost of products does not always equal
demand for such products.
A few key executives and engineers left the company in 1981. Among
them was
Pierre Lamond, who had been
the chief IC designer (now partner at
Sequoia Capital). Robert Swanson's leaving
the company in the same year to found
Linear Technology was another indication
of the appropriateness of organisational strategies of National
Semiconductor under Sporck. "For 13 of 14 years at National, I was
a gung-ho guy. Then, the company started to get big. I kept looking
at all the companies whose butts we'd been kicking. And then
National started organizing itself like them. It was frustrating."
Swanson said in the May 13, 1991 Business Journal-San Jose.
Sporck's strategy of outsourcing sales to external sources meant
National Semiconductor did not have sufficient or responsive
resources to respond to requests from innovators, inventors and
academic research - which would have been helpful in the
technological innovation boom of the 1980s.
National Semiconductor's lack and loss of innovation meant it was
producing products that were easily copied and reproducible. It may
have been the cheapest manufacturer in the United States, but it
was not the cheapest compared to the Asian manufacturers. This
weakness in National Semiconductor was evident in its failure to
compete during the globalisation of Japanese semiconductor
companies in the 1980s, followed by the Taiwanese and South
Koreans.
Leadership under Gilbert F Amelio
On 1991 May 27, Charles E Sporck was replaced by Gilbert F Amelio
as CEO and president.
Amelio was then president of Rockwell International's
semiconductor division and has a Ph.D. in physics from Georgia
Institute of Technology
. Amelio had also been formerly employed at
Fairchild.
Amelio was faced with a company plagued with over-capacity and
shrinking market share. Amelio found that, just prior to his taking
helm, despite having spent US$1 billion over the last five years on
research and development, National Semiconductor had a
disappointing record in new products. The Business section of The
New York Times January 11, 1991 reflected the over-capacity
generated by Sporck that had to be inherited by Amelio.
Amelio disposed off the non-core products and assets in which
National Semiconductor had no market motivation or expertise and
turned the company towards its core expertise - analogue
semiconductors. National Semiconductor under Amelio emphasized on
reduction of cost of sales, improving capacity utilization, scrap
reduction and cycle-time reduction. Redundant facilities were sold
and consolidated.
With the progress of restructuring, National Semiconductor had
revenues increased with each year. In 1994, National Semiconductor
under Amelio posted record net revenues of US$2.29 billion. It was
also a time when US semiconductor companies had regained market
leadership. Amelio introduced benchmarking to evaluate
productivity, restructured marketing strategies and reorganised
management by introducing modern management practices and workplace
environments.
Amelio divided products into two divisions: Standard Products group
which comprises low-margin, logic and memory chips - commodity
products which were more susceptible to cyclical demands and
through which National Semiconductor had matured; and
Communications & Computing group which comprises high-margin,
value-added analogue and mixed-signal chips. Amelio's thus division
of products seemed to prepare National Semiconductor for the
eventual disposal of low-margin commodity products, which came to
fruition later with the sale of a reconstituted Fairchild.
National Semiconductor under Amelio chose to build a brand new
eight inch (203 mm) wafer fabrication plant in South Portland,
Maine. It chose to divest itself from its then somewhat new plant
in Migdal Ha'Emeq, Israel.
In 1995, Amelio was elected to be the chairman of the board of
directors of National Semiconductor.
In 1994,
Amelio accepted invitation from Apple Computer
, a customer of National Semiconductor, to join its
board of directors. Troubles at Apple later prompted the
board to invite Amelio to take on the position of CEO, which he
accepted in February 1996. National Semiconductor announced the
resignation of Dr. Gilbert F. Amelio as the company's President,
Chairman and Chief Executive Officer on February 2, 1996.
The current leadership: Brian L. Halla
National Semiconductor announced the appointment of Brian L. Halla
as its chairman, president and CEO on May 3, 1996. Halla was then
the head of LSI logic products division. Prior to LSI, he had been
with Intel for 14 years.
Halla reinforced Amelio's emphasis on the expertise of National
Semiconductor in analogue technology. He also was, on occasions, an
evangelist for analogue technology. However, he found that National
Semiconductor under Amelio had insufficient product offerings.
Halla embarked on a diversification into personal computer and
graphics business.
He advocated PC-on-a-chip (aka system-on-a-chip) as a business
direction for National Semiconductor. During his tenure at LSI, LSI
had successfully applied similar concepts. However, LSI had steered
clear of getting involved with PC technologies that would make it a
competitor with Intel.
Halla held the vision that information appliances (IAs) would
succeed the personal computer as a trend. He predicted that IAs
would overtake sales of PCs by the year 2000.
To achieve the goal, National Semiconductor started acquiring
companies that would provide the technological complements to do
so. Among the acquisitions were Cirrus Logic Inc's PicoPower
business, for its specialised expertise in small form factor
devices; Mediamatics Inc, which makes multimedia connectivity
products; Future Integrated Systems Inc, a PC graphics company;
Gulbransen Inc, a digital audio technology maker; ComCore
Semiconductor Inc, a maker of digital signal processing for LANs;
Cyrix, the maker of Intel x86 clones.
On March 11, 1997, National Semiconductor Corporation announced the
US$550 million sale of a reconstituted Fairchild to the management
of Fairchild with the backing of Sterling LLC, a unit of Citicorp
Venture Capital. Fairchild carried with it what was mostly the
Standard Products group previously segregated by Amelio.
Incidentally, the effective price of acquisition of Cyrix was also
US$550 million.
On November 17, 1997 National Semiconductor and Cyrix announced the
merger of the companies. Cyrix would become an autonomous wholly
owned subsidiary. Halla had earlier emphasized that National was
after the low-end CPU market as part of the system-on-a-chip
pursuit and therefore would not place emphasis on Cyrix's current
development of high-end 6x86MX design. However, Cyrix later
announced that its merger with National Semiconductor would not
change its development or marketing plans.
The acquisition of an independent-minded Cyrix subsequently turned
National Semiconductor from a collaborator into a competitor with
Intel. National lost its business with Intel. Intel reinstated the
relationship after the sale of Cyrix.
The acquisition of Cyrix also carried with it a business obligation
as well as technical constraints to use IBM microelectronics
division to fabricate the Cyrix chips, while National Semiconductor
had plans to transfer their fabrication to its South Portland
fab.
National incurred huge losses due to its processor business and
announced the sale of Cyrix to VIA in 1999.
In 1999, National Semiconductor also put out feelers that it would
sell, if not the whole then a majority stake of, its fabrication
plant in South Portland, Maine. However, that did not come to
fruition.
On June 28, 2000, National Semiconductor and TSMC Taiwan signed an
agreement that would allow transfer of advanced fabrication
technologies from TSMC to the National Semiconductor fabrication
plant in South Portland, Maine.
On March 11, 2009 National said it plans to close its assembly and
test plant in Suzhou, China, and its wafer fabrication plant in
Arlington, Texas.
Manufacturing locations
National Semiconductor also had operations in Migdal (tower)
Ha'Emeq (valley), Israel. National Semiconductor had six inch
(152 mm) wafer fabrication operations there. In 1993, National
Semiconductor divested to retain 19% ownership of the plant.
The plant
in Migdal
Ha'Emeq
, Israel is now constituted as Tower Semiconductor
of Israel.
Products
History of National Semiconductor logo and product
identification
The following picture excerpts illustrate the history of
identification marks of National
Semiconductor.Image:Old_National_Semiconductor_Calculator_-_Focusing_on_Logo_Area.jpg|National
Semiconductor logo during the time of Charlie Sporck.
From an old National Semiconductor
calculator.Image:National_Semiconductor_IC_-_focusing_on_logo.jpg|National
Semiconductor logo during the latter time of Charlie Sporck till
the time of Gil Amelio.
From an IC manufactured during the time of Gil
Amelio.Image:National_Semiconductor_Brochure_Excerpt_-_focusing_on_logo.jpg|Most
recent/current National Semiconductor identification.
From a National Semiconductor brochure.
See also
References
External links
Wikis
Quiz
Map
Search