Cyrix sale: Business as usual
Published: 06 May 1999 07:44 BST
In fact, as the disposition of subsidiary Cyrix Corp.'s technology and design teams are debated over the next three to six months, the company hopes to garner more business. "It is pretty much business as usual for the PC part of the Cyrix business," said Steve Tobak, vice president of marketing for National. "I don't expect there to be any sales falloff. If there are new orders, we'll take them."
National revealed on Wednesday that the company would be selling off its PC chip-making subsidiary Cyrix and getting out of the PC chip market. The company bought Cyrix almost two years ago, and so far, has had profits dragged down because of competition in the low-cost PC market.
Analyst Mike Feibus of Mercury Research in the US thought National would have a tough time gaining new business with Cyrix on the block, but said it's not an impossibility -- for the low-cost PC market, price is almost everything. "As long as they can bring a cost advantage to the low-end, that's what it is all about," he said. emachines Inc., which uses the Cyrix MII in two of its current products, doesn't believe the exit strategy will affect its business. "We are sad to see National exit this market segment, but it will have no effect on our business," said Steve Dukker, president of the low-cost PC maker. "We have good relationships with Intel and AMD and our Q3 product roadmap is in place." Dukker would not comment on whether future products will include Cyrix processors or will exclusively use those of Intel and Advanced Micro Devices.
As part of its sell-off of Cyrix, National intends to layoff 550 people -- about 5 percent of its worldwide work force -- and take a charge of up to $300m (£183m) in fiscal 1999. National intends to keep the designs and technologies associated with its integrated MediaGX processor that has done well in the information appliance market.
IBM Corp. is rumoured to be a potential buyer of Cyrix.
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