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Technology Stocks : Rambus (RMBS) - Eagle or Penguin
RMBS 94.82+2.7%3:59 PM EST
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To: unclewest who wrote (14038)1/22/1999 12:15:00 PM
From: Bernard Super  Read Replies (4) of 93625
 
Thanks, unclewest, for giving your cut at RMBS royalties as a function of chip production revenues.

I'd appreciate someone checking the following arithmetic:-

Based on your figures:

40% of 2% of $15 = 12 cents to RMBS bottom line per chip sold.

Or for every $1 billion revenue to the chip mfrs:
$1 billion/($15x.12)= ~$8 million to RMBS' bottom line = $0.32/share.

Taking into account (1) the fact that, acc. to RMBS annual report, RMBS gets paid in the quarter following shipment of any chips, and
(2) RMBS' announced increased R&D spending over the next three quarters to support the intro of RDRAM, and (3) the Samsung estimate of a total Yr2000 RDRAM market of $13.5B, and Yr1999 mkt $2.6B (I assume Samsung meant this as total, of which their share would be 30%), I come up with the following:

4/14/99 - no effect (i.e. $0.08/sh - higher R&D compensated by limited already made deliveries to the boxmakers.

7/14/99 - no effect (higher R&D uses up additional royalties from prior quarter chip shipments).

10/14/99 - $0.24/share (an extra $0.5B shipped to hungry boxmakers in prior quarter. I'm assuming there are still severe chip mfr capacity limitations at this point)

1/14/00 - $0.40/share ($1B RDRAMS plus the current .08/Q running rate)

For all of calendar 2000, $10x$0.32 = $3.20/share (I reduced $13.6B to $10B to account for the the one quarter time lag).

Once again, I'd appreciate someone checking these figures, as I'm prone to arithmetic blunders.

Regards - Bernard
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