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

To: CoffeePot who wrote (38105)	3/14/2000 5:43:00 PM
From: Dave B	Read Replies (1) \| Respond to of 93625

Stockalysis, As far as RDRAM becoming mainstream technology the price is going to have to come down substantially from the current $900-1000 128mb chip. You're not saying anything that anyone here isn't already deeply aware of. If you go back over the thread, you'll see constant discussions of the need to get prices down. If you go back to the late Feb/early Mar timeframe, you'll find a set of posts from me summarizing the annual meeting and within those posts you'll find the factors that Rambus expects will help reduce RDRAM prices. Several posters are tracking price declines over time to verify whether new initiatives and vendors are affecting the pricing. Right now Rambus estimates the difference in cost of manufacturing RDRAM at about 40% (it costs 40% more to make a RDRAM chip vs. SDRAM) chip. By next year they expect that to be 10% to 15%. The difference in price right now is much greater than the 40% because there are too few vendors and the early manufacturers can take advantage of the demand (if there was no demand right now, the prices would collapse very quickly because they'd want to sell it for at least something). Once additional vendors get up to speed, the price differential will decline to more closely match the cost differential. Incidentally, your claims that it's too expensive were also made when the industry transitioned from EDO to SDRAM. No new news. I posted a set of articles about a year ago that said the exact same thing about SDRAM as is/was being said about RDRAM. I'm not making any claims one way or another about the current stock prices. Prices go up and they go down. But there is a clear roadmap for reducing the price of RDRAM over the next 6-12 months. Finally, if you think the price is high now, wait until Hitachi settles or loses the lawsuit. RMBS will skyrocket under the (possibly incorrect) assumption that they'll get royalties on SDRAM, DDR DRAM, et cetera. You do not want to be short this stock on that day. Dave