Intel Corp’s dominance of the microprocessor market has been strengthened even further over the past year with news that yet another of its feeble competitors failed to produce enough Pentium-compatible chips to meet demand. National Semiconductor Corp issued a profits warning concerning its current third quarter to March 1. While it has been hit by Asia’s economic problems, half of the profits shortfall is due to the its recently acquired Cyrix business unit, which it said had failed to achieve satisfactory production levels to meet demand. With PC manufacturers desperate for alternatives to Intel for Pentium- class chips, both Cyrix and Advanced Micro Devices have been unable to boost production to satisfy customers. A NatSemi spokesman refused to discuss the problems they face ? and there is similar embarrassment at AMD which in November parted with Vinod Dham, vice president of the computation products group, amid speculation that he was blamed for failure to build up production of its K6 chip to sufficient levels (CI No 3,290) Given Cyrix and AMD’s long experience in fabrication, their simultaneous failure to boost output is a mystery that must have produced merry chuckles in the Intel boardroom. Rubbing salt in the wound of its rivals, Intel Corp has just cut prices on its existing Pentium chips by up to 51%, pulverising profit margins for those struggling in its wake. NatSemi said that sales and earnings would fall below the second quarter level of $720m and $0.19 per share respectively, and the stock immediately fell 16% to $23.5.
