Hi blake paterson; Thanks for your reponse.
(1) Gelsinger ain't running the desktop group any more. Wonder why? I don't.
(2) The cost of RIMM memory upgrades at DELL is still sky high compared to SDRAM. Dell may be getting some parts cheap, probably due to a long term contract that Samsung wrote with them last year, but you can bet that Samsung ain't too happy about it. In any case, the market price for RDRAM is still sky high. Where is that link that gives memory prices anyway?
The thing to remember here is that we are talking about system performance improvements of a few percent, but machine price increases approaching 100% (for machines with 512MB of RDRAM, as any high end workstation type machine would want. My workstation has 768MB, for instance.) Not a good buy, and RDRAM has a long way to go down before parity is even approached.
The other thing to remember is that the memory makers have repeatedly stated that the cost adder is around 40 to 50%. This is a huge price increase, compared to DDR. Engineers are paid to cut 0603 resistors out of production designs, every penny counts. RDRAM just isn't close, and if it were, the graphics houses would be all over it. But they are ignoring it completely. Not even a hint in the trade press that RDRAM is even being considered for future graphics boards. (On the other hand, there was lots of forewarning that DDR was going to be hot in the graphics industry starting nearly a year ago. I posted links to that effect in my long post on graphics some days ago. The implication is that RDRAM isn't going to be in graphics announcements for the next 6-8 months as an absolute rock bottom minimum.) That sort of indicates that the price of RDRAM isn't going down to within 50% of DDR SDRAM in the next six months.
(3) Re support for RDRAM. The key is what is being done to reduce the price of RDRAM. Intel is doing nothing to reduce the price of RDRAM, instead, their actions are supporting the price. Intel, after all, provides a use for them. Intel (and perhaps Rambus) hope that competition will cause the memory makers to reduce the price of RDRAM, but this is not something that Intel has any control over. Instead, that is in the hands of the memory makers, and they hate paying royalties. Intel got out of the memory business back when I was still accidentally puncturing myself with the leads on DTL logic.
(4) It is true that the DRAM industry doesn't control pricing. But they do control production, and they ain't making enough RDRAM to drop the price. The current price of RMBS assumes that the company takes over a good portion of the industry, not just the PS2 win. The full lifetime over product royalties for PS2 is mighty small compared to $200 per share.
(4b) Re the driver's seat. Cool that you guys can come up with a psychological reason why I might wish to see Rambus history. It's kind of a stretch, though, don't you think? Only a manager would think that to hook up a memory system all you have to do is paste a couple of files from Rambus. The real world is a lot more complex. Doubt this? Go take a look at the interfaces that Rambus provides for insertion into standard cell chips. If you read the manual associated with it, you will discover that it is at least as complicated as the Rambus chips themselves. Nope, their's plenty of work around.
On the other hand, I can make much more accurate guesses as to the psychological motivation for people who believe that Rambus is going to take over the business.
A good portion of the people putting pro Rambus information on the Internet are directly connected to the company, and are in a position of taking advantage of the stock price. Go look at the insider trading on RMBS. Not a single purchase of a single share by any insider whatsoever. Just sales. And, by the way, some of the announcements are for execution of stock options with immediate sells. When the insider doesn't hold for a year in order to get a 50% reduction in taxes you have to wonder why he is trying so hard to get out of the stock.
Another group of people want to think of themselves as technologically literate. So they think that they should be able to analyze a company and determine whether that company's technology makes sense, and direct their investments accordingly. They look at Rambus, and it makes sense to them. The problem with these people is basic hubris. They have no idea how complex the many issues are in the industry. They are outsiders, not insiders, and aren't able to understand the implications behind the terse quotes put out by the memory companies, much less the details of the spec sheets. When total BS appears, they are unable to recognize it as such, and true to normal human behaviour, they ignore the information that suggests that they are wrong, and instead concentrate on the misinformation that suggests that they are right.
The fact is that modern technology is complex in the extreme, and there are no easy answers. Certainly the investing community in general is in no position to understand where technology is going. If it were, BREX wouldn't have gotten the big market cap it had before it fell apart. Instead, they have no choice but to reduce very complex ideas into simple one liners.
There are a lot of people who are going to trade RMBS as a stock, not as a technology play. They will do well, providing they are good stock traders.
But the only reasonable reason for sticking with the stock is the hope that Intel can force the technology onto the industry. But with each passing day that RIMM prices are 50% higher than DIMM prices is another indication that Intel is failing in this. It will be late this year before the consequence of actions that Intel took this past fall will be evident. Until that time, it will continue to look like Intel is "supporting" Rambus. After Intel has a DDR chipset, look to them to ramp it as fast as possible, with all possible PR etc. Intel cannot afford to have the memory industry walk away from them (in the arms of AMD), and, in the end, Intel has no choice but to follow.
-- Carl |
