Hi Zeev Hed; I was looking for back when you turned bearish on RMBS, for the short term, and began to suspect that you might get that $133 entry. I came upon an old post of yours from March 15, 2000 regarding the economics of manufacturing RDRAM.
You wrote: "Samsung has already decided to increase their production rates to 10 MM units per month," and also that "The intrinsic mass production cost differential is no more than 15%, that is why Samsung is going to do fabulously, charging anywhere from 50% to 200% more for RMBS while their intrinsic "charge up" is in the 15% to 30%." #reply-13206841
At that time, Hyundai had already announced that even though they could sell the chips for 200% over SDRAM prices, they still made less profit per wafer. That was only one company, and was pretty easy to ignore. But now the memory makers have refused to sell RDRAM at anything other than market prices, ignoring Intel's request to increase production (in the absence of guaranteed orders) and bring the premium down to 30%.
Also, the recent Samsung announcement is to increase production from the current 2 million to only 3 million per month. No mention was made of any 10 million per month production, though I suppose that is possible in the future.
In light of what has recently transpired, do you have an update on your feelings regarding the economics of manufacturing RDRAM, and perhaps the future of the company?
-- Carl |
