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

To: unclewest who wrote (26647)	8/8/1999 11:42:00 AM
From: grok	Respond to of 93625

RE: <Dan3: So getting people to pay twice as much is going to be rough. rmbs ceo stated last month that he sees the cost differential settling into the 10% range. if the oems can sell rdram for your twice as much, they will love it. on the other hand, with a 10% cost differential, they have lots of wiggle room. unclewest> I can believe that the theoretical cost difference today is 40% although supply/demand and various business issues have the price difference at 100% or even 200%. I say theoretical because cost is complicated due to most dram makers using their newest 0.18u technology for rambus since they can't make the 800 MHz data rate otherwise. Therefore, the rambus chips would be assigned higher cost than the 40% difference since the new 0.18u equipment is being depreciated. Another factor is the rambus chips are being made mostly at 128Mbit whereas the cheapest sdrams are 64Mbit currently. The die size of the rambus 128Mbit chips with the extra die size due to rambus is probably a little too large for optimum yield (beyond the knee of the curve for the new 0.18u technology). For these reasons the current actual cost of rambus chips per bit over the cheapest sdrams is likely a lot more than 40%. But as time goes by it will come back to 40%. As more time goes by it will go below 40%. Consider 1Gbit rambus vs ddr-sdram which will likely be the big alternative to rambus in 2-3 years. The ddr-sdram grows a little from a 1Gbit sdram due to the ddr interface. The rambus RAC shrinks due to the advanced technology and becomes smaller relative to the huge dram core. The expensive rambus test equipment has been paid off. Etc, etc. Maybe eventually the cost difference is 10%. It's conceiveable, in several years.