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April 9, 1989

INCREASED INVESTMENT PROMISED AS SGS-THOMSON OUTLINES ITS PLANS FOR INMOS

By CBR Staff Writer

With the final agreement between SGS-Thomson Microelectronics BV and Thorn EMI Plc for the transfer of Inmos International Plc signed only last Monday, Pasquale Pistorio, president and chief executive of the French-Italian semiconductor firm has moved fast in formulating his plans for Inmos and the Transputer within the group. Inmos, which is to retain its own identity, will be SGS Thomson’s entry into the lucrative 32-bit processor market, while Thorn EMI is left with 10% of a new holding company, the other 90% being held by SGS-Thomson Microelectronics BV. The French and Italian shareholders, Thomson-CSF, and IRI/Finmeccanica, each retain their full 50% holdings in SGS-Thomson Microelectronics BV. According to Pistorio, the future for Inmos within the SGS Thomson Group is bright, and it will not in future be held back by lack of financial or marketing muscle. Pistorio said it was too early to put a figure on the investment, but claimed that Inmos would continue to show a profit over the next year although we will settle for a lower profits in return for accelerated growth. The acquisition moves the $1,000m-a-year company up one place to number 12 in the world league and second among European semiconductor manufacturers, behind Philips NV. Benefits for SGS-Thomson include a UK presence, including advanced fabrication facilities at Newport, South Wales, and a range of technology that includes static RAMs and graphics processors. Motivation The prime motivation for SGS-Thomson’s acquisition, is of course the Transputer, which, said Pistorio, will give his company a high-level entry into the 32-bit microprocessor market. It was not only the first of the new generation microprocessors, but remains the most advanced, he claimed. We intend to establish it as a world standard. Sceptics, however, point out that Intel and Motorola are fast catching up: Intel’s recently launched 80860 integrates memory management, floating point and integer processing on a single chip designed for multi-processing, and some forecasters claim that Motorola and Intel will between them have the 32-bit market just about sewn up by 1992. But Inmos’ new managing director Michael Wright claimed that the Intel part was both complex and expensive, and has been the subject of ridiculous performance claims. As a result of the acquisition, he said, long-term investment plans were already being put into operation, including an acceleration of product development that would be manifested in both people and manufacturing facilities. Pistorio said that he was considering a second European source for the Transputer, and announced that the SGS-Thomson plant in Dallas, Texas, would begin manufacture to support growing demand from the US Defense Department. The Transputer now has 1,000 customers, said Wright, with 350 design projects underway, including 120 in volume production. Inmos also said it would be releasing its long-term development plans to developers in the third quarter of this year, including the announcement of a standard, Inmos-supported operating environment for the Transputer – currently developers are faced with a choice of five or six competing environments – and more effort on applications software in specific markets, such as CAD/CAM, financial and transaction processing, that will take advantage of the Transputer’s parallelism. The next-generation Transputer is currently under development, with plans for a 15 MIPS chip for launch later this year, with 30 MIPS next year, and 40 to 50 MIPS in 1991 said Wright.

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