National Semiconductor was an American semiconductor manufacturer which specialized in analog devices and subsystems, formerly with headquarters in Santa Clara, California, United States. The company produced power management integrated circuits, display drivers, audio and operational amplifiers, communication interface products and data conversion solutions. National’s key markets included wireless handsets, displays and a variety of broad electronics markets, including medical, automotive, industrial and test and measurement applications.

On September 23, 2011, the company formally became part of Texas Instruments as the “Silicon Valley” division.

History

Founding

National Semiconductor was founded in Danbury, Connecticut by Dr. Bernard J. Rothlein on May 27, 1959, when he and seven colleagues, Edward N. Clarke, Joseph J. Gruber, Milton Schneider, Robert L. Hopkins, Robert L. Hoch, Richard N. Rau and Arthur V. Siefert, 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, Robert Widlar and Dave Talbert, 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 de facto head of semiconductor operations at Fairchild and Sporck was his operations manager. Sporck was appointed President and CEO of National. To make the deal better for Sporck’s hiring and appointment for half his former salary at Fairchild, Sporck was allotted 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, like many companies, National retained its registration as a Delaware corporation, for legal and financial expediency. Over the years National Semiconductor acquired several companies like Fairchild Semiconductor (1987), and Cyrix (1997). However, over time National Semiconductor spun off these acquisitions. Fairchild Semiconductor became a separate company again in 1997 and 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 2003. 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, 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 standardizing 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.

Acquisition by Texas Instruments

On April 4, 2011, Texas Instruments announced that it had agreed to buy National Semiconductor for $6.5 billion in cash. Texas Instruments paid $25 per share of National Semiconductor stock, an 80% premium over the April 4, 2011 closing share price of $14.07. The deal made Texas Instruments one of the world’s largest makers of analog technology components. On September 19, 2011, the Chinese minister approved the merger, the last one needed.[citation needed] The companies formally merged on September 23, 2011.