FWIW here are my notes from the call. I do this both to archive it and in case anyone is interested.
First I thought the call began rather lame as an obvious attempt to support the stock with absolutely nothing behind it. As the call progressed I found their performance improving somewhat.
Announced 4 things in essence. An upgrade to their existing tech to 1.6Ghz, 6.4GBS to be described 1H00 at a major conference, released for licensing by 2H00 and in shipping products by 2001. Second, that they have design wins from "many" companies in the comms sector subject to NDA but with a series of announcements for licenses and products in 2000. Third, their addressing of the additional chip to chip interface market which they estimate as an additional $150B market beyond the DRAM market. New applications in this market will be described in 2000 and they pointed out the 4 year timeframe from new tech to actual products shipped hinting at the sked for these new applications. Fourth, they announced the reorg.
Concerning the status of existing RDRAM. Comfortable with analysts estimates for 2000. (That would be .57 earnings - 1st call). Wouldn't estimate market penetration but referred to Dataquest's opinion that RDRAM would dominate DRAM market by late 2001 - 2002. Tate stated that noise regarding DDR exceeds reality. Still believes DDR offers only marginal - 20% improvement over existing SDRAM. Whereas RDRAM offers 3x for 1 channel and 6X for 2 channel improvements in bandwidth. Stated only Via and Micron had DDR parts and he knew of no DDR PCs. Stated DDR was behind in performance and productization. Said DDRII was only other tech he had heard of and that his guess for productization was 2003 and so didn't see it as "immediate threat". Stated that they believe they have fundamental IP on high bandwidth chip to chip interface. Stated that they now have DDR parts in hand and a definitive evaluation as to whether DDR violates IP will be made 1Q00. Went on to say that while they see no direct threat to RDRAM presently, if a threat did arise they believe believe there would be a hard time avoiding their IP. Stated that in bandwidth they were obvious leaders while in latency they offered same as SDRAM given that 1st order factors for latency is the core which is similar in RDRAM & SDRAM. Believe in streaming apps, etc. bandwidth is important while in traditional apps latency is important. Pointed out 6x increase in bandwidth in a few years in the low end consumer segment from Nitendo to PSII as evidence that bandwidth where they lead is critical factor.
Regarding new 1.6Ghz, 6.4GBS tech. It is evolutionary. It will utilize high degree of leverage regarding existing infrastructure. It will require renegotiating licenses on a case by case basis determined by the nature of existing contracts. Upward compatible with existing signaling. Tate felt better about this gen rollout given that it builds on previous work. Some slight expense increase that will likely be offset by some small license rev increase. Pointed out that new gen may be either increase in data rate per pin or in increase in pins - wasn't excluding either approach - hinted that depended on sector. Noted that PCs don't need this new tech as existing RDRAM fine for now. Made two points regarding use of new tech. First very low end with very demanding user interface, ie. PSII example. Second, very high end, mentioned Alpha with 10+ GBS on the processor. Clock jitter not an issue in new or existing tech.
Regarding comms design wins to be announced. Mentioned routers and switches, that they had many design wins and that Dataquest estimated comms DRAM market 9% of overall DRAM market. Noted that ASPs were higher in this area and that with internet could be more significant than 9% indicated.
Regarding new chip to chip interface applications (Additional $150B market) - 2-3 years before products royalties.
Regarding reorg. D.M. to take over day to day as President, Tate to keep CEO and focus on strategic issues as well as IP. 70 existing patents more filed. Could be signaling a DDR IP battle also or at least the threat. S.T. to head New Ventures Group. |
