Hi mishedlo; Re Micron's losing billions of market cap. I would guess that the Rambus lawsuits contributed to some of that. That doesn't have much to do with whether the suits are a good idea from the point of view of the long term outlook for Micron. Micron is kind of pricey right now, at something like 6 x annual sales. The memory business is famous for boom and bust cycles. I wouldn't think that shorting MU for a long term trade would be a horrible idea right now, but I wouldn't do it.
The only really good long term news for the memory industry right now is that the number of players is decreasing, and the market is fragmenting. Rambus eventually taking over the market would be horrible news for the memory makers, it would force them to sell nothing but commodity memory. Perhaps Micron, Hyundai and Infineon's management is looking at that sort of thing, as well as their belief that Rambus' patents are covered by prior art (to the extent that they cover SDRAM).
But even though it appears that the number of players is decreasing, there are very bearish trends in the works for the commodity memory sellers. Some of the big players who have exited (or are exiting) the commodity memory business are still keeping a hand in the embedded and MCM memory business. That is the long term trend that will eliminate royalties for RMBS, even if they do get the industry to pay for SDRAM/DDR. Embedded and SOC / MCM is the wave of the future, and Rambus has no patents in that area (that I am aware of.) I have seen some hints that Micron is getting ready for this next transition in the business, but nothing very concrete.
The management at Micron is undoubtedly paid largely in stock options, (though I didn't look), and have the interests of the shareholders very close to their vests. It is also possible that they have ego related reasons for doing what they did. But the same could be said of the Rambus players, and that isn't a terribly good explanation for why Hyundai and Infineon are involved in lawsuits as well.
-- Carl |
