Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: mishedlo who wrote (42662)	5/21/2000 6:15:00 PM
From: Bilow	Read Replies (1) \| Respond to of 93625

Hi mishedlo; Re real cost of SDRAM to Dell &c... Assuming "market" prices of RDRAM at 2.5x SDRAM, memory costs for a 128MB machine would be something like $12.50 * 8 = $100 for the SDRAM, and presumably 2.5x that, or $250 for RDRAM. (But I bet that Dell actually pays under 2.5x) The difference would be $150. Call it $50 with Dell only having to pay a third of the 150% adder that Samsung quoted. This is minimal, but it doesn't take into account the other costs involved, and, more importantly, it doesn't take into account the required markup between manufacturer and customer. Other costs associated with RDRAM are around $20. This includes such incidentals as the RIMM heat spreaders, the continuation module, the extra termination voltage, the tighter tolerances required on the motherboard, etc. That markup is something like 3x, so the actual price difference is about $210. Maybe more, maybe less. This doesn't seem like much, and compared to the price of the whole computer it isn't, but putting the money into an upgrade on the processor will give more bang for the buck. But maybe there is a little mistake in the basic assumptions of our calculations here. Maybe we are taking a look at only a very small part of the elephant. Maybe $210 is a lot of money to Dell, on a per computer basis, compared to their profits, and maybe they can get that back by shipping a DDR based machine at the same price, with higher performance and easier manufacturing. Whatever. Believe what you will. Fact: If the box makers gave firm orders for RDRAM in large volume the memory makers would manufacture it. Intel seems to be convinced that isn't the case. Maybe you should be too. Maybe you should think about why that is. -- Carl