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To: zsteve who wrote (47946)	9/2/1999 2:00:00 PM
From: DJBEINO	Respond to of 53903

Rambus Falls After Intel Says It Will Use Competing Technology By John Stebbins Mountain View, California, Sept. 2 (Bloomberg) -- Shares of Rambus Inc. fell as much as 12 percent after Intel Corp. said it will use a lower-cost memory-chip technology that competes with Rambus's because computer makers want a cheaper alternative. Rambus fell 7 7/8 to 87 3/8 in late morning trading, after touching 83 1/2. Its shares traded as high as 117 1/2 on July 16 amid speculation that its technology will become the standard for dynamic random-access memory chips, or DRAM, the most common memory chip in personal computers. Rambus's technology improves the performance of memory chips. Intel, the world's biggest computer-chip maker, said yesterday that it plans to support an alternative called PC-133 starting in the first half. PC makers want the technology available until Rambus-based memory chips become less expensive, Intel said. ''We've known for several months that Intel has been evaluating PC-133,'' said Seth Dickson, a Warburg Dillon Read LLC analyst, who reiterated his ''strong buy'' on Rambus. ''This thing is way overblown.'' Easier and Less Expensive Rambus licenses its high-speed technology to memory and microprocessor makers, who pay royalties for it. Rambus, Intel and many DRAM makers this week started a working group whose goal is to make Rambus chips easier and less expensive to produce. Although Intel's decision is viewed by some as a blow to Mountain View, California-based Rambus, Intel maintains that the PC-133 technology will only be a steppingstone to Rambus systems. ''The two technologies will co-exist until the market plays out,'' Intel spokesman Michael Sullivan said yesterday. Dickson said he expects that in 30 days, Dell Computer Corp., the No. 1 direct seller of personal computers; No. 3 computer maker, Compaq Computer Corp.; and Hewlett-Packard Co., the No. 2 computer maker, to announce the availability of Rambus- based PCs. ''Intel views Rambus as strategically important to their next processing platform, and PC-133 is really just a short, interim step,'' Dickson said. Santa Clara, California-based Intel will design a chipset that supports the PC-133 memory technology. A chipset acts as the intermediary between the microprocessor and other parts of a PC. Some PC makers, faced with plunging prices for their machines, are balking at using the more expensive Rambus-based memory chips. The chips can cost three to five times as much as current chips, some analysts said, and offer little reason for the average PC user to buy Rambus-based PCs. Still, market-research firm Dataquest Inc. estimates the percentage of DRAMs sold based on Rambus's technology will rise to 67 percent in 2002 from 3.1 percent this year.