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

To: grok who wrote (30976)	9/28/1999 1:11:00 AM
From: MileHigh	Read Replies (1) \| Respond to of 93625

Rambus Plunges for 2nd Day on Intel Product Delay (Update4) Rambus Plunges for 2nd Day on Intel Product Delay (Update4) (Adds comments from PC makers, analysts, closing share prices.) Mountain View, California, Sept. 27 (Bloomberg) -- Rambus Inc. shares fell 17 percent, their second plunge in two days, after Intel Corp. delayed a product that works with Rambus's computer memory-chip technology. The shares dropped 12 1/16 to 59 1/16. The decline follows a 19 percent tumble Friday when investors became concerned about a delay in introducing the technology that improves the performance of memory chips. Rambus shares have lost half their value from a high of 117 1/2 on July 16. Intel, which backs the Rambus technology, said a problem is causing it to delay for a second time a product called a chipset that works with Rambus's chips. The delay led No. 2 computer maker Hewlett-Packard Co. to put off shipping the latest models of its Vectra corporate PC and Kayak workstation. ``We're on hold,' said Hewlett-Packard spokeswoman Andrea Bass. ``Those systems will not ship until Intel fixes the problems with Rambus.' Bass declined to estimate the impact on Hewlett-Packard's sales. Hewlett-Packard shares fell 1/2 to 96 1/8. Intel said it's looking at three areas to determine why a computer with Rambus's technology may have problems. It's investigating the Rambus-based Camino chipset, which acts as an intermediary between the computer's processor and its memory; the way the memory is set up; and the motherboard that holds several chips, said Chuck Mulloy, an Intel spokesman. ``Any delays in the acceptance of the Rambus technology opens the door wider for a potential competitor,' said Drew Peck, an analyst at SG Cowen. He cut his rating on Rambus on Friday to ``neutral' from ``buy.' PC Makers Some 100,000 to half a million motherboards are likely to be affected by the problem, said Peter Glaskowsky, senior analyst at MicroDesign Resources, a technology analysis firm. ``That may sound like a lot, but that is a small fraction of what is made in a month and should have little impact on Intel and the (PC makers),' Glaskowsky said. Dell Computer Corp., based in Round Rock, Texas, near Austin, said it discovered problems with the chipsets during its testing process. Because the No. 1 direct PC seller carries little inventory, the delay won't affect its operations, spokesman John Weisblatt said. No. 1 PC company Compaq Computer Corp. discovered problems during routine testing and hadn't taken any of the product from Intel. The company wasn't planning to switch to the new chipset in its manufacturing process until the fourth quarter, said spokesman Alan Hodel. Now, Compaq is awaiting word from Intel on when the chipsets will be available, Hodel said. International Business Machines Corp., the No. 1 computer company, wasn't immediately available to comment on the delay. ``More than likely, if they (PC companies) had shipped the machines, your average user would not know anything was wrong,' Glaskowsky said. ``This is a very subtle problem.' Another Standard? Intel has promoted the technology with the intention of making it an industry standard that would support its newest microprocessors. Recently, Intel said it would support an interim technology, PC-133, until Rambus is ready. That's still the case, Intel's Mulloy said. Intel rose 2 33/64 to 78 3/16. Several memory-chip makers have proposed exploring a type of memory setup called Double Data Rate SDRAM. Though a standard for that architecture doesn't exist, the longer Rambus takes to ramp up, the greater the threat to Rambus, analysts said. Morgan Stanley Dean Witter & Co. analyst Mark Edelstone cut his rating on Rambus shares to ``outperform' from ``strong buy' and dropped his fiscal 2000 earnings forecast to 60 cents from 80 cents a share. He now expects the shares to reach 110 in 12 months, less than his previous forecast of 150. NYSE/AMEX delayed 20 min. NASDAQ delayed 15 min.