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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Leroyt who wrote (23310)	6/22/1999 1:00:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 93625

Leroyt, if you want to build a "profits" model, you may want to use a "steady state" DRAM market at about $25 Billions annually, and use a ramp up from 10% next year to 65% in 2003, I think you will be very conservative. I think that the $100 Billions of Dataquest is just like the $30 billions or so they had two years ago for 1999. While bit counts is doubling, yearly, prices are already down some 40% just in the last six months (some say even more). What Greenberg is absolutely missing in his analysis is that 1.7% of DRAM sales requires no investment by RMBS in capex (the killer for the dram makers), and it is going to flow at the rate of close to 50% (or higher if RMBS is tax smart) to the bottom line, INTC in good years does not get 50% gross margins, let alone after tax profits. What Greenberg is missing as well is that DRAM's revenues might not even be 50% of RMBS total revenues. How can that guy miss so much? Permabears are simply blind to the realities of the market, you would think that Greenberg will better understand the market forces influencing the share price of MU (and he misses this one constantly). What really surprises me is that some people actually pay for that advice. Zeev