|
|
DEAR SHAREHOLDERS, I thank you for your interest in our corporation. National Semiconductor's fiscal year ends in May, which was also my first month on the job, so the majority of this letter will be forward looking. As I write this letter, the semiconductor industry is experiencing a time of uncertainty, inventory correction, and in the memory area, over-capacity -- a fitting backdrop by the way, for what I believe begins an era of the most positively exciting times for our corporation. My goal for National is that it becomes a "new" company, in control of its own destiny, leading its industry with a well-diversified market, product and customer portfolio. We will drive innovation in the fastest-growing markets and continue our march toward ever increasing financial strength. To position the company we took immediate steps to reduce layers of management and the number of committees. These actions reinforce and support our desire for individual accountability. After a thorough review of our product areas and operations, we quickly established and communicated to the organization three strategic imperatives: leading-edge process technology, world-class manufacturing and an accelerated time-to-market methodology. Senior executives have been assigned the specific ownership of each imperative. Recognizing that National's businesses operate with two distinct sets of characteristics, we formed separate organizations, each with a management focus geared to maximizing success and profitability. Fairchild Semiconductor, long recognized for customer service, was the name given to the entity dealing with the commodity, high-volume, manufacturing and distribution-intensive parts of our business, including such products as family logic and memory components. The remaining businesses -- which are based more on intellectual property, customer specific needs, unique value added and research and development -- will be marketed as National Semiconductor. National is widely acknowledged as a leader in analog and mixed-signal circuit design capability. The strategy of the National entity will be to exploit this analog and mixed-signal expertise as a point from which we will integrate forward -- putting entire systems on a single chip for our strategic trendsetting partners. The National organization now consists of three product groups: Analog, Personal Systems and Communications and Consumer. |
|
Looking ahead, I believe the information superhighway is very real. The phenomenal growth of the internet industry is a compelling indicator. The semiconductor industry is now scrambling to increase the bandwidth of the "pipe" (by adding more lanes to the superhighway). Additionally, our industry continues to push ahead on process technology, to decrease the number of system components and lower the cost of the information superhighway "access appliances."  My definition of such appliances includes personal computers, digital video disks, video games, set-top decoder boxes, cellular phones, personal digital assistants, internet browsers and even television sets. National has a unique position relative to the dynamics of these markets. Simply put, information is "analog" and analog is National's key strength. Today we are already a technology leader in many areas, including high-performance Ethernet™ components, as well as high-speed input/output devices for personal computers. We are also leading the industry in high-performance audio amplifiers, cellular radio frequency solutions and flat panel display technology -- all essential elements of presenting "information." The future looks bright for National Semiconductor. The environment appears ideal for our growth. Our competencies, our heritage and our mainstream products all center on the needs of this new age -- the Information Age. We are dedicated to driving the process technology, design skills and manufacturing capabilities that make it a reality. Personally, I couldn't be happier to be here. 
|