Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Alan Hume who wrote (25039)	7/24/1999 10:15:00 PM
From: John Stichnoth	Respond to of 93625

Alan, Apologies for the slow response. Vacation took me out of reach. On Intc's buying Micron--First, understand that I am only thinking out loud (if that makes sense on a message board :o)). My thinking is that with the introduction of RDRAM, a proprietary standard is introduced into the RAM market. That is discontinuous from prior DRAM evolution. I absolutely understand your point that intc doesn't want to be in the commodity chip game. Commodities equal thin margins. Baaad! The thought comes out of the Gorilla Game thread, and book. Companies that control essential technologies, the thesis goes, become gorillas, and are able to extend their influence into adjacent areas. (My apologies to author Moore for such a terse summary of his thesis, that took a book to explain). A clear example of the Gorilla influence is Cisco's ability to leverage an early lead in one router area into hegemony over the entire switching/router environment of the Web. Intel of course has gorilla position in cpu's. They have used that position effectively to take the lead in the accompanying chipsets to the cpu's. A logical extention of that, it seems to me, is to the memory side. And while the memory side was earlier not attractive because of its commodity status, things are now changing: 1. RAM in 3 years will no longer be an open system. All significant RAM makers will be paying a royalty to Rambus. And perhaps all PC's will be built with RDRAM chips. The field will have changed from an open system to a closed system. 2. Increasingly tight integration of the system components will occur in the next several years, as speeds get higher and tolerances get smaller. More and more there will be an advantage to having all of these components developed under one roof. That--by the way--is Natl Semi's hope with their system on a chip development. Add to the above external factors the fact that intc already has potential ownership positions through warrants in both companies--and I guess you get my point. Oh, and by the way, I absolutely agree that intc does nothing with micron if they don't first get control of rambus. Anyway, I was and am just thinking out loud. I have no basis for the above, other than my own thought processes. And, I'm not sure what difference it would make in our investment decision on any of these companies. They still have to perform. Best, JS