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

To: jim kelley who wrote (41625)	5/8/2000 10:37:00 AM
From: milo_morai	Read Replies (1) \| Respond to of 93625

I have Jim. Here's some homework for you "Price Issue Let's take a look at the problems people have with Rambus. First is the price. RDRAM's high price tag is probably the main issue people have with Rambus. We all know that RDRAM pricing needs to fall to SDRAM levels before Rambus can become a true contender. Semiconductor manufacturers should be ramping up RDRAM production in the next two years, and prices should fall dramatically by the end of 2001. People may try to blame high prices on the Rambus royalty when it's clearly a supply and demand problem. Rambus is an IP (Intellectual Property) company. Rambus has invested millions of dollars to develop its IP portfolio. The company generates revenues by licensing that technology. Dram Review found an interesting article which includes an estimate that "TI collects an average royalty of about 2% on every DRAM sold." Rambus' royalty isn't exorbitant, but we have to admit that DDR's "open standard" appeals to our sense of freedom. What about the Hitachi lawsuit? IP companies have to use litigation to protect themselves. Intellectual property is Rambus' only product. You can't expect the Rambus to back down when it feels someone is infringing on its source of income. We acknowledge the fact that RDRAM needs more time to increase supplies and lower prices, but ultimately, everything depends on cost. If prices fall to SDRAM levels as expected, people will begin to look at Rambus in a whole new light. Other issues While price is the main issue, others may still have performance issues or problems with Rambus' relationship with Intel. We performed a quick search of Rambus' most recent 10-Q and found more information regarding the Intel warrants: In January 1997, the Company granted a warrant to Intel Corporation for the purchase of 1,000,000 shares of Rambus common stock (the "Intel warrant") at an exercise price of $10.00 per share. The warrant will become exercisable only upon the achievement of certain milestones by Intel relating to shipment volumes of Rambus-based chipsets (the "Intel milestones"). One million shares may sound like a lot, but it's still less than %5 of the company. The deal is currently worth about $200 million to Intel -not much when you consider that Intel made $2.31 billion in after tax earnings in the last quarter alone. Of course, the deal will be far more valuable if RDRAM becomes the industry standard, but we're still inclined to believe that Intel really believes that Rambus is the future of PC memory. While RDRAM barely outperforms SDRAM in many benchmarks, RDRAM soundly beats SDRAM in memory bandwidth tests. We also have to keep in mind that RDRAM and 820/840 based motherboards are still fairly new, and we still don't know all the little BIOS tweaks yet. As for DDR SDRAM, InQuest's DDR vs. RDRAM inqst.com performance comparison offers very interesting results, but we'll have to get our hands on our own DDR system and run our own tests before we can make any judgements. What we think firingsquad.com If the Inquest data is correct RMBS is a dud! Milo

To: jim kelley who wrote (41625)	5/8/2000 10:40:00 AM
From: milo_morai	Read Replies (1) \| Respond to of 93625

Bottom line We're pretty simple people over here. Give each of us a good, overclockable CPU, a nice video card, some affordable memory, a couple of good games, and you have a bunch of happy campers. RDRAM looks interesting, but price is a huge concern for us. We'd rather not approach performance comparisons until prices fall to reasonable levels (we're not even willing to pay $500 for a CPU). Basically, we just have to wait a year or two. If RDRAM falls in price and becomes mainstream, we'll do a bunch of comparisons. If not, we can always find more video cards to review and CPUs to overclock. It's unfortunate that RDRAM supplies weren't ready for the 820 release, but launching a new memory standard isn't a very common event (let's see you get seven different DRAM manufacturers to start production in unison). RDRAM offers us another choice, but we don't want to look at it until it's affordable. For now we're content to say that Rambus isn't an evil, greedy corporation. The greedy (ahem business savvy) tag applies to the manufacturers taking advantage of the RDRAM supply and demand levels. The evil tag... goes to JELL-O for discontinuing the JELL-O Pudding Pop. Update: We will probably have one or two RDRAM comparison articles in the future since we have to justify paying an ungodly amount of money for our 128MB 800MHz RIMM. firingsquad.com He has a very good point, that I feel is the main problem with RMBS is price/performance Milo