Rambus (RMBS) - Eagle or Penguin Message Board

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Technology Stocks : Rambus (RMBS) - Eagle or Penguin

RMBS 108.58

+8.5%

Nov 5 3:59 PM EST

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To: Ian@SI who started this subject	10/7/2000 10:24:24 PM
From: jim kelley	Read Replies (2) of 93625

Edelstone's latest analysis of Rambus messages.yahoo.com "- Rambus story is no longer about RDRAM acceptance, but about MM's signing licensing agreements for SDRAM/DDR. Next year RDRAM penetration rates will again become an issue, simply because 2% is greater than 1%, but for now the stock will trade on news of new signings. Rambus and the MMs are playing a high stakes game of poker. Rambus will win; it holds the trump (refusal to license patents to those defeated in court.) - Additional SDRAM licenses are not built into street models. If the big five MMs sign, the $0.48 estimate for next year should jump to $1.25. - 3 of the Big Five will sign within the next 120 days. Infineon (they will get shredded in German courts if they go to trial,) Samsung (strong desire to pay lower royalty rates than Hyundai), Hyundai (unwilling to jeopardize business). This would mean 5 of the largest 6 suppliers have signed. Micron is the lone holdout. - Micron will hold out for as long as possible – will eventually sign for higher royalty rates. - Rambus is dead serious in their statement that they will not license to defeated DRAM makers. The patents are airtight – anyone that has ever designed a DRAM can validate that. JEDEC/Prior art is the only point of contention. - Rambus volatility has dried up. Technicals are super strong (upside resistance is near $120 and a rising, tight flag has formed.) News will result in a breakout. - Samsung could sign “any day now” They have been contacted regarding patent violations, but Rambus is pushing the issue somewhat less than at other suppliers due to the production emphasis on RDRAM. - Next step: Licensing SDRAM/DDR technology for memory controllers. Intel, AMD all network processor vendors, chipset manufacturers (Via?) will have to pay. Should be a larger revenue source than DRAM within three years due to higher royalty rates. - 2001 story, all MMs have signed. Patent assertion on processing/controller applications, adoption rates of RDRAM (1% v. 2% issue) and DRAM prices will be the primary drivers for the stock. - P4 will not penetrate the market effectively until Intel moves to .13um processes. Likely in June-Sept. 2001. Bandwidth advantages will make P4 a highly desirable product in the long run. AMD is one of the worst business in the semiconductor space and Athlon is difficult to scale above 1.5GHz. DOWNSIDE RISKS: 1) Multiple contraction. Unlikely. Power of a 95% GM business is only beginning to be realized. 2) Infineon will produce legal arguments in early November in publicly available court documents (possibly in German) for the mid-December trial date. It should be immediately clear if a case against Rambus exists."

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