Sorry, Zeev, you're way off.
Peak, including DRAM, chipsets, and controllers will be approx 100 billion. Average royalty will be closer to 1.5% since RDRAM is 1.5%, SDRAM is approx 1%, DDR is approx 2%, controllers are higher, etc. With 35% tax rate, gives us approx 1 billion in earnings or $10 a share.
Now, let's add all the new goodies RMBS is into. Tate has not been wrong yet, and he says that DRAM is but 60% of RMBS. Taking him at his word, we will then reach $16 per share.
That should give us a $300 valuation.
This is probably best case. But you were talking best case. |
