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: unclewest who wrote (25529)	7/22/1999 10:31:00 PM
From: pompsander	Read Replies (1) \| Respond to of 93625

Uncle and thread....a little greenmail perhaps! The EE article and other items out in the past 72hours really make me wonder if Intel isn't the object of some old fashioned greenmail by the fab plants. Item one: Intel pumps hundreds of millions of dollars into chip companies to incent them to produce RDRAM. Chip companies salivate as easy money is laid before them. They see the prospects of more. Item two: Intel stays firm in its support for RDRAM throughout Spring. But, holy cow, despite a massive retooling effort, fab plants have trouble producing enough product, or product of sufficient quality. Intel feels pinched, as (it is finally revealed) the original Camino ship delay is not due to technical issues, but due to supply). Intel begins to sweat, just a little. Item three: Early price points for RDRAM samples are ridiculously high. Everyone admits they make no sense in light of actual costs of production, etc. Price points stay high, into July. Manufacturers admit demand for RDRAM (especially 800 mghrtz) is high, so they keep price sky high to offset falling SDRAM margins. A game of chicken develops.....Will intel stay loyal to RDRAM or blink of PC 133 "study". Item four: Intel blinks, but RDRAM is stil the only game in town for now. Chip companies cry out that they are producing as much as they can, and it is SO expensive. Maybe, maybe, if Intel could help out just a little more to subsidize the product. Maybe just a few hundred million dollars more to assist the poor companies in keeping the initial RDRAM costs competitive with PC100 or eventual option of 133. Without this cash influx, the costs of the scarce, and highly in demand RDRAM 800 must stay high. It's only fair! Camino is only six weeks away. What is Intel to do? Item five: Write your own ending. Options....Intel pays the dram companies, in effect subsidizing RDRAM rollout at a "reasonable" price. Or, Intel works as hard as possible to bring new fab lines up, so more companies producing product increase competition, meet demand and lower price (the evil Micron is in here somewhere). Or, Intel does nothing and the chip companies sell what they can at whatever price they want, but and it is a big but.......they could kill the goose that lays the golden egg if they allow a profitable line like RDRAM to be overtaken or seriously impacted by a competitive, but not nearly as profitable, in the long run, technology. this is how big companies go broke --doing dumb things in the short term. Poor Intel......choices,choices...and rambus caught in the middle. Pomp