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Technology Stocks : Intel Corporation (INTC)
INTC 34.50+2.6%Nov 21 9:30 AM EST
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To: Brian Malloy who wrote (40896)11/21/1997 3:34:00 PM
From: Jeff Fox  Read Replies (3) of 186894
 
Brian, re: RMBS royalty - NOT

Jeff, can you share with us why you think this royalty is way out of line?

Sure, several reasons,

1. A chipset does a host of functions of which the memory bus is but one. There is no reason to pay RMBS for any more than their IP, which is a small part of any chipset's value.

2. A 25% external royalty is a huge part of gross margin. Such a hit would make any chipset unprofitable to any manufacturer.

3. Intel selected RMBS. Without this endorsement nobody would be looking at it for PC memory. Intel has made RMBS. It is a good guess that Intel negotiated a contract with RMBS to its liking. Given the values I wonder if RMBS is paying Intel!

4. Rambus-D simply cannot work without Intel engineering envolvement. The timings and required circuit tricks are embedded with the technology process perameters. I suspect that Intel more investment with this than Rambus. They have likely pour circuit design resources, skills and test chips into assuring that Rambus-D works with high yields for their .25 process combined with all prototypes of the coming DRAMs. I would guess that it is Intel driving the development coordination across all DRAM manufactures. Again Rambus should be compensating Intel.

Jeff
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