National Semiconductor is to pay a large amount of money to IBM Microelectonics to sever the contract to fab its 6x68 chips, according to reliable sources close to the company. NatSemi-Cyrix will hand over a figure in the region of $40 million, according to the source. That will mean that IBM Micro will, effectively, stop producing x.86 clone processors. Although it has an existing contract with AMD, that is understood to be close to termination also. IBM Micro had a deal to produce the wafers for Cyrix, before it was bought by National Semiconductor last year. But the arrangement has always been fraught with difficulties, with IBM Micro often undercutting Cyrix products and antagonising the channel. Late last month, NatSemi said it would be able to produce the vast majority of its MII processors itself by the end of this year. But the deal, when it goes ahead, is likely to antagonise existing companies which use the 6x86 part. The sources said that Granville, part of Time, is likely to switch to AMD processors to build its PCs. At press time, no-one from IBM Micro, NatSemi, Granville or AMD had responded to the report. ®