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

To: pompsander who wrote (25540)	7/23/1999 12:57:00 AM
From: grok	Respond to of 93625

RE: <Well, why would Intel sink hundreds of millions (maybe a billion direct and indirect) investment into a technology with no immediate benefits? They are not that stupid.> Most of that billion is investment in Micron and Samsung. This comes out of their vast cash horde and does not effect their operating run rate. Dram companies must switch their whole lives around to design, produce, and test drdram chips and they've been operating mostly at a loss for the last 3.5 years. PC manufacturers are struggling to keep up their growth rates and stock prices in light of rapidly falling PC ASPs. In short, Intel expects the rest of the PC infrastructure to finance a migration to drdram. Is it surprising that there is reluctance? RE: <So, if the benefit can't be seen now, I just have to believe it will be seen, big time, in the future.> Intel wants drdram so that 3D Graphics systems and servers can have "cleaner" solutions. But this represents a small fraction of the overall market. Why should the majority pay for the minority? RE: <Now, I am a dumb guy, but Intel...those guys seem to know a little about strategic direction. Of course, it could just be that Intel fears it will go broke if people don't continue to buy new and powerful chips with bigger profit margins. But, really, they could keep that billion dollars working in other ways if there was no real need for that power...> There would be no controversy and I wouldn't even be bothering to type out messages like this if Intel just would have decided to support sdram and drdram equally well with their chip sets for the next several years while the dram infrastructure sorted itself out. Eventually drdram strengths would rise and costs would fall until the whole PC business could vote on what was best. Instead they decided to immediately jam drdram down the throat of the industry. That was arrogant and also very risky to Intel. It can even adversly impact their competitive situation with AMD at a time when Athlon may take over performance leadership. They've also created a big opening for Via/NSM with their chip set which supports PC133. It was just a bad decision and eventually they had to back off. It looks now like they will support PC133 at least to a reasonable extent. Rambus will likely still happen but it will be later and it will have to contend with the PC100/PC133/DDR/DDR-II continuum that is rallying with renewed vigor currently and may rule a large fraction of the market indefinitely.