National to sell imaging chip business to Kodak

Continuing to divest select product lines, National Semiconductor Corp. said on Aug. 24 it has signed a definitive agreement to sell its imaging chip business to Eastman Kodak Co.

As part of the agreement, Kodak will acquire certain assets, including IP and equipment. It also plans to hire about 50 employees from National's Imaging Business. Financial terms of the transaction were not disclosed. The sale is expected to close in the next few weeks.

"This transaction benefits both companies," Brian Halla, chairman, president and CEO of National, said in a statement. "For National, this sale enables us to further sharpen our focus on core analog capabilities that provide the strongest returns for shareholders."

"Kodak has a long history of image sensor innovation in both CCD and CIS technologies," said Chris McNiffe, GM of Kodak's Image Sensor Solutions organization and VP of its Display & Components division, in a statement. "The addition of the Imaging business from National will further strengthen our CIS design and development expertise as we target high volume applications such as consumer digital still cameras and camera phones."

National maintains an investor and business relationship with Foveon Inc., a privately held company which patented the Foveon X3 direct image sensor. The transaction with Kodak does not include any of National's ownership interest in Foveon or related IP.

The deal represents the latest effort to divest non-core products by National. Last year, National agreed to sell its Information Appliance business unit, which consists primarily of the Geode family of microprocessors, to Advanced Micro Devices Inc.

Last year, National closed its cellular baseband business unit, resulting in the loss of 340 positions.

Earlier this month, National lowered its revenue guidance for the first quarter of fiscal 2005 ending Aug. 29, citing weak demand in the distribution channel for flat-panel displays and among Chinese wireless handset makers.

National's new guidance forecasts first quarter revenue to decline 4 to 5 percent from the $571.2 million reported in the fiscal fourth quarter. National said in June during its fourth quarter earnings conference call that first quarter revenues were expected to range from flat to up 3 percent sequentially from the fourth quarter (see Aug. 11 story).

- Mark LaPedus

Silicon Strategies