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Technology Stocks : Rambus (RMBS) - Eagle or Penguin
RMBS 95.53+0.7%Nov 28 12:59 PM EST
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To: Don Green who wrote (73220)5/18/2001 5:07:21 PM
From: Dave B  Read Replies (2) of 93625
 
Memory prices have been heading downward since the beginning of the year due to excess supply. Major memory chip producers have made aggressive price cuts to head off sluggish demand for DDR caused by a PC sales slowdown.

Thus far DDR SDRAM price cuts have not yielded increased sales, but they have slimmed profit margins for DRAM producers in an already depressed market. Many producers struggle with inventory backlogs of older products and seem to cut prices just to drive volume sales.

...

Though the price cuts may drive acceptance of DDR, major DRAM manufacturers could hurt their own pockets in the long run, said IC Insights senior analyst Brian Matas. "Micron could shoot themselves in the foot," said Matas. "They'll sell more units, but at lower prices and this will hurt their profits, at a time when profits are already tight."

Normally, I'd agree with this last statement -- by the time DDR systems show up in volume (if ever), there won't be any profit to be made on DDR, either -- except that if Micron doesn't get the DDR volume bandwagon rolling soon, they'll be in an even bigger world of hurt with just (unprofitable) SDRAM to sell. So, at this point, they really need to do anything and everything they can to encourage the adoption of DDR as the next standard. They have no choice.
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