INTEL, VLSI CANCEL AGREEMENT ON POLAR CHIP SANTA CLARA, CA, August, 1994 -- Intel and VLSI announced that they won't extend their two-year old agreement to develop the Polar Chip for Personal Digital Assistants. Also, Intel has announced it will sell its shares in VLSI, which it bought two years ago for $50 million. It has been speculated that Intel's original interest in VLSI was to prevent AMD from out-right buying the company at the time. Neither company will be hurt by the divesture. The Polar chip is a 386 CPU core integrated with I/O modules developed for PDAs. The sell-off also shelves plans for a jointly developed integrated CPU based on the 486. Both companies agreed to continue supporting existing Polar-based designs. However, Intel does not plan to leave the PDA market. It has plans to develop a 16-bit 486 chip, code-named Hummingbird, to be designed for operation at 2.8V. There is also plans down the road to develop even lower voltage devices.