Brian Halla on PC-on-a-chip

Electronic News, Nov 3, 1997

San Jose, Calif.--The concept of the sub-$1,000 PC continues to gain momentum and, coupled with continued component integration, this is causing a break in the routine semiconductor industry pattern. In response, a new category called PC-on-a-chip is emerging, according to Brian Halla, president and CEO of National Semiconductor.

Mr. Halla said he foresees PC-on-a-chip driving the market growth as the new millennium approaches. He boldly predicts that this new type of PC will enable the market to grow from 80 million units today to 800 million PCs shipped annually.

"There is another thing that really drives the growth of the semiconductor industry, especially in Japan, and that is all these things that I would call information appliances. Today we have names for them and those names are closely associated with Japan--the handheld personal computer, the personal digital systems video games, digital versatile disc--in addition to PCs."

Mr. Halla thinks the market will reach that volume within the next three years. "We're looking at 500 million kinds of Windows-compatible information appliances.

"And a lot of that is depending on the price points going down to the $500 range. That's what the Japanese have excelled in the past and that's what will continue to drive cost down. All of those products I just mentioned have technology that drives the semiconductor industry.

Mr. Halla predicted the sub-$1,000 PC would give way to a $500 PC market. "First of all we've all seen just about every day for the last two-and-a-half weeks, people talking about the sub-$1,000 market. Of course some companies got blindsided by it. For the first time we've got tier one companies targeting that price point with state of the art products, not PCs from last year."

This is not a situation where people will buy less expensive PCs in order to save money but will buy full-featured ones.

"That price point works for many families. Some who couldn't afford computers in the past will buy their first one. Those with PCs will get second and third PCs. So it's not a cannibalization market, it's additive. The price point for sub-$1,000 PC, which I believe will start to approach $500 for a PC, will have an exponential effect on the PC market overall. I would predict that the market for today, which is 80 million units a year, will grow to 800 million units a year--with DRAM and everything that goes with a PC--not de-featured, but full-featured PCs.

"We all talk about Moore's law but if you think about it, we're approaching within the next year and a half or so an era where we can put 100 million transistors on a single die, and now we're talking about the ability to put about 10 PCs on a single chip not including the DRAM. That's pretty phenomenal in terms of what you can do to reduce the cost."