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

To: Dan3 who wrote (28607)	9/3/1999 5:55:00 AM
From: Stuart Steele	Respond to of 93625

Rambus Shares Tumble 5% On Concerns for Intel Support By MARIA V. GEORGIANIS Dow Jones Newswires NEW YORK -- Rambus Inc. shares fell Thursday on what analysts said were unfounded concerns that Intel Corp.'s support of the PC133 memory technology indicated that it was backing away from supporting Rambus's chips. Rambus lost $4.75, or 4.9%, to finish at $90.50, on volume of 4.7 million shares, compared with average daily volume of 1.35 million shares. Earlier, the shares reached as low as $83.50. The semiconductor giant plans to ship a chip set that supports Rambus's R-DRAM design in late September, an Intel spokesman said. He noted that PC133, which is based on the older S-DRAM standard, is a "transition" technology. Both PC133 and Rambus-designed DRAMs increase the speed data are transferred from a computer's memory to its processor. As processors become more powerful, data needs to move at a more rapid pace to take advantage of the extra horsepower. Last month, Intel disclosed that it was evaluating the PC133 technology, said S.G. Cowen & Co. analyst Drew Peck. PC133 provides modest performance improvements over its predecessor, PC100, and computer users won't notice a difference, Mr. Peck said. Intel is supporting the PC133 memory technology to be competitive with other chip makers from a marketing perspective, Mr. Peck said. Intel plans to ship a PC133 chip during the first half of next year, the spokesman said. Intel and Rambus have had a long-term relationship to co-develop and promote the Rambus memory technology as the standard for personal computers. Dell Computer Inc., Hewlett-Packard Co. and Compaq Computer Corp. are expected to announce PCs with R-DRAM technology this month. "Intel said PC133 is not competitive with Rambus and doesn't conflict with the Rambus ramp," said Warburg Dillon Read LLC analyst Seth Dickson. The Rambus R-DRAM technology is two to three times more expensive than the S-DRAM memory standard, Mr. Dickson said. That gap is expected to narrow over time, to perhaps 25% by mid-2000 and 10% to 15% by 2001, he said. Intel is targeting its R-DRAM chip sets to computers priced above $1,000. The company is projecting that R-DRAM will be shipping for the value segment of the market, or sub-$1,000 PCs, in late 2000. Intel's support of PC133 "was not a surprise, given delays in the ramp-up of R-DRAM," said Merrill Lynch & Co. analyst Joe Osha in a research note Thursday. The chip maker raised the issue over when R-DRAM will be cheap enough for computers costing $1,500 or less, said Mr. Peck, adding that the current version of R-DRAM is most suited for PCs priced at $2,000 or above. That issue is the potential challenge in establishing Rambus's technology as the standard, Mr. Peck said. Any delay in developing lower cost Rambus memory chips could open the door to alternatives, he said. A Rambus spokesman wasn't immediately available for comment.