National Semiconductor's Geode Processor Powers Set-Top Boxes For America Online's AOLTV

Geode Technology Continues to Rock the Information Appliance Market

Santa Clara, CA -- 6/20/2000 -- National Semiconductor's (NYSE:NSM) alliance with America Online (NYSE:AOL) to develop Internet-ready TV set-top boxes gives both companies a leading position in the emerging interactive TV market. The National® Geode™ processor, the cornerstone of National's information appliance solutions, provides the core technology for a new line of enhanced but easy-to-use TV set-top boxes that will give consumers access to AOL's new AOLTV service.

"AOLTV is the culmination of National's long-standing relationship with AOL to bring Internet access beyond the PC and into the living room," said Brian Halla, chairman, CEO and president, National Semiconductor. "Because of AOL's prominence, this is a major milestone in our strategy to deliver information appliances to the consumer market."

The AOLTV set-top box, manufactured by Philips Electronics, is the first interactive television service for mass-market consumers. Designed to enhance the television experience, the service utilizes AOL's interactive content and includes such well-known features as e-mail, instant messaging and chat. The set-top box and service will be offered in selected markets this summer and will be sold exclusively at Circuit City Stores within the target markets and online through the AOL website.

"Halla has been predicting the revolution of 'the beyond the PC era' since he came to National," said Tim Bajarin, president of Creative Strategies, Inc. "Four years ago many people were skeptical; today he is seen as a visionary. AOLTV is just one example of how Geode technology is driving and enabling this market."

Thanks to the popularity of the Internet, industry analysts forecast exponential growth for the information appliance market during the next few years. "Everybody wants access to the Internet, and one of the easiest ways to deliver it is right through the box on their TV set," said Michael Polacek, vice president of National's information appliance division. "For companies that go 'beyond the PC' to make Internet services available to consumers, the opportunities for growth are tremendous."

The installed base for set-top boxes worldwide is 104 million and the market is growing by 30 million units per year. Other information appliances, such as WebPAD™ devices, are also experiencing dramatic growth.

"By 2005, more than 70 percent of the world's Internet users will use information appliances to access the Internet," said Egil Juliussen, president of eTForecasts. "National is well positioned to capitalize on this market. They have over 120 different customers who are working with Geode technology today."

About National Semiconductor
National Semiconductor provides system-on-a-chip solutions for the information age. Combining real-world analog and state-of the-art digital technology, the company's chips lead many sectors of the personal computer, communications, and consumer markets. With headquarters in Santa Clara, California, National reported sales of $2.1 billion for its last fiscal year and has about 10,500 employees worldwide.