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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Jim McMannis who wrote (111061)	5/15/2000 9:13:00 PM
From: jim kelley	Read Replies (5) \| Respond to of 1576979

Here is more bad news for you..... Via screws AMD...Comments solicited messages.yahoo.com

To: Jim McMannis who wrote (111061)	5/15/2000 10:36:00 PM
From: chic_hearne	Read Replies (2) \| Respond to of 1576979

Re: This is what I'm afraid of (RDRAM prices coming way down) Jim, I had to do a re-read of the article and the second time through I noticed that the author is either; lieing or doesn't understand basic economics. Since this was a highly technical article, I would say he doesn't understand the basic economic principle of supply and demand. I would add to that; how stupid does Rambus think we are? Forget the technicals (others are more qualified to argue that) Economics-101 on RDRAM prices by chic hearne Take this direct quote: Whether or not you want to believe that is up to you, but Rambus did help put some incredibly poor rumors to death. The biggest rumor was that the yields on Rambus parts had dropped to ridiculously low levels. While we could not get an exact figure out of Rambus, we figured that the yield on RDRAM is decently close to that of SDRAM A few paragraphs later is this direct quote: Currently, you can find a 128MB PC800 for under $600 if you shop around, but if you compare this to $100 you can pick up a generic 128MB PC133 module for, that's still quite pricey. I'm not an expert on the memory business, but I know it's a comodity business. For memory suppliers, profit margins are very slim. If prices drop, you get killed (look at what happened to MU's earnings for example). So that's the state of the memory business, razor thin margins that can collapse on you. As the article suggests, you can pick up 128MB PC133 module for about $100. How much do you think the manufacturer makes? My guess is they would be very happy with $5 per 128 MB. But as MU can tell you, if spot prices fall, forget about making money. There are dozens of companies fighting it out for a piece of the memory business. Then you have Rambus claiming that yields of RDRAM are decently close to SDRAM. Unlike SDRAM, you can sell your 128 MB RDRAM for $600. If yields are approaching SDRAM yields, how much could you make on each 128 MB of RDRAM? Given Rambus claims, you would have to assume at least $200-300 per 128 MB. So why are all the memory manufacturers fighting it out to stay profitable when they could be making at least $200-300 per 128 MB by making RDRAM instead? This is not the law of supply and demand. This is a complete line of bull shit out of Rambus. I don't know what the problem is, but there is one, or else all the memory manufacturers would be rushing to make RDRAM with its HUGE profits. Sure, yields are fine, demand is strong, whatever... Barrett is our friend. Burns is our friend. RAMBUST is our friend. chic