8-K

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                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    ---------

                                    FORM 8-K



                                 CURRENT REPORT



                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934


         Date of Report: (Date of earliest event reported): May 16, 1998



                          Digital Equipment Corporation
- --------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

Massachusetts                             1-5296                 04-2226590
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(State or other jurisdiction           (Commission            (I.R.S. Employer
incorporation or organization)         File Number)          Identification No.)

111 Powdermill Road, Maynard, Massachusetts             01754
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(Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code:  (978) 493-5111


- ----------------------------------
(Former name or former address, if changed since last report)


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Item 5.  Other Events

On May 18, 1998, the registrant and Intel Corporation ("Intel") issued a press
release reporting that on May 16, 1998, the sale of its semiconductor
manufacturing operations to Intel was completed. In addition, the registrant and
Intel will file documents dismissing previously filed lawsuits in Massachusetts,
California and Oregon.

Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.

(c)   Exhibits

Exhibit No. 99     Press release dated May 18, 1998 announcing that on May 16,
                   1998, the registrant's sale of its semiconductor
                   manufacturing operations to Intel Corporation was completed.

                                    SIGNATURE

Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, hereunto duly authorized.


                               DIGITAL EQUIPMENT CORPORATION
                               (Registrant)


                               /s/ Gail S. Mann
                               -------------------------------------------------
                               Vice President, Assistant General Counsel, 
                               Secretary and Clerk


Date:  May 18, 1998

EX-99

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     EXHIBIT 99



Investor Contacts:                             Media Contacts:
Diane Basile                                   Dan Kaferle
Digital Equipment Corporation                  Digital Equipment Corporation 
978-493-7182                                   978-493-2195  

Gordon Casey                                   Chuck Mulloy
Intel Corporation                              Intel Corporation
408-765-1679                                   408-765-3484


                   DIGITAL AND INTEL COMPLETE SALE OF DIGITAL
                     SEMICONDUCTOR MANUFACTURING OPERATIONS


SANTA CLARA, Calif./MAYNARD, Mass., May 18, 1998 - Digital Equipment Corporation
today announced that the sale of its semiconductor manufacturing operations to
Intel Corporation has been completed.

     The transaction, which closed over the past weekend, includes the transfer
of the assets of Digital's semiconductor manufacturing operations in Hudson,
Mass., along with design and marketing facilities in Austin, Texas, and
Jerusalem, Israel, to Intel for about $625 million after taking into account
closing adjustments. Approximately 1,800 Digital employees became Intel
employees at the closing.

     Intel will serve as a foundry for multiple generations of Digital's 64-bit
Alpha microprocessors while Digital retains the Alpha technology and
Alpha-related semiconductor design teams to develop future generations of the
microprocessor.

     In addition, the companies will file documents dismissing previously filed
lawsuits in Massachusetts, California and Oregon.

     As part of the settlement, Digital and Intel also have entered into a
cross-license of patents. In addition, Digital is working with Intel to port its
Digital UNIX operating system to run systems using Intel's future 64-bit
microprocessors. Digital also will work with Intel and Microsoft to establish a
common programming environment for 64-bit Windows NT applications for Alpha and
IA 64 platforms.


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     Digital Equipment Corporation, recognized for product and service
excellence, is a leading supplier of high-performance, Web-based computing
solutions which help enterprises compete in the global marketplace. Digital
gives its customers a winning Internet advantage through a comprehensive
portfolio of Internet solutions based on award-winning systems, advanced
networking infrastructure, innovative software and industry applications -
including those from its business partners. The expertise and experience of
Digital employees help customers plan, design, implement, manage and support
Internet solutions in countries throughout the world. For the latest company
information, visit Digital on the World Wide Web at http://www.digital.com
and/or http://www.newsdesk.com

     Intel, the world's largest chipmaker, is also a leading manufacturer of
personal computer, networking and communications products. Additional
information about Intel is available at WWW.INTEL.COM/PRESSROOM.