National Semiconductor to Cut Workforce

Chip maker cutting about 5 percent of its workforce and selling two business units.

Chip maker National Semiconductor Corp. is cutting about 5 percent of its workforce and selling two business units in an effort to save money and streamline operations.

National Semiconductor will cut about 500 jobs from its global workforce of about 10,000, the Santa Clara, Calif., company announced on Thursday.

The company also is looking to sell its Information Appliance unit—which primarily comprises its Geode family of processors for various electronic devices—and its cellular baseband business. National Semiconductor has hired outside advisers to help with the sale, company officials said.

In a prepared statement, CEO Brian Halla said that while these businesses have a strong future, National Semiconductor could no longer invest in them while waiting for the markets to grow.

"We have cast our nets far and wide, but in this challenging environment, we are prioritizing [research and development] spending on product areas that drive higher returns sooner," Halla said.

The company also has entered into an agreement with Taiwan Semiconductor Manufacturing Corp. Under the deal, Taiwan Semiconductor will supply to National wafers for chips at .15 microns and below, saving National the cost of building its own fabrication facilities.

Officials said the company will continue to focus on its analog business in such areas as wireless handsets and flat-panel displays.

National is scheduled to release its quarterly earnings March 6.