So rather than buy commodity chips on the open market, router vendors are now forced to bankroll the development of hardware that supports faster FIB lookups.

Toshiba follows Hitachi and others in backing away from commodity chips in favor of higher-end products like the sophisticated chip sets used in cellular phones.

We took advantage of these cheap commodity chips and we just wanted to make it work.

Although orders also rose for National's Fairchild unit, the company is still in the process of seeking a buyer for this business, which makes primarily commodity chips that sell for as little as several cents each.

Additionally, the Amiga's custom chips cost more to produce than the increasingly ubiquitous commodity chips utilized in PCs, making the A1200 more expensive.

In 1985 and 1986 Japanese chip makers slashed prices on commodity chips in an effort to gain market share.

While the company has usually derived most of its revenue from commodity chips like memory devices, it said that in 1993 about half of semiconductor revenue came from what are called differentiated products.

IBM plans to focus on offering specialised multichip modules rather than basic commodity chips, although it has started to offer memory chips in Japan.

National had said last year that it would sell Fairchild, which primarily makes high-volume commodity chips, and focus on products that command higher prices and generate higher profits.

The headline improvement is thought to have come about because demand for US-made microprocessors held up while demand for commodity chips for consumer products slumped.