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: anandnvi who wrote (44416)	6/15/2000 2:35:00 AM
From: Bilow	Read Replies (3) \| Respond to of 93625

Hi anandnvi; Re "what events would convert you to" RDRAM or RMBS. Great question! Re RDRAM bull. As a technology, without respect to its level of adoption in industry, etc., RDRAM is a poor competitor. The graphics board makers, who are not constrained by Intel chipsets, have made that clear. But level of adoption in industry is of too much importance to ignore. It all boils down to one thing, and one thing only, and that is the price of memory. Whatever memory type is cheapest will rule, and it will rule until it gets knocked off the roost by lower prices with the next technology. It is possible for a poor technology to end up the industry standard just by dint of its adoption. There are plenty of examples of this all over the place. But it became too late for RDRAM to achieve that level of adoption needed from late last year. In the above paragraph I deliberately ignored issues of power consumption, bandwidth, etc. By and large, these don't matter nearly as much as price. The exceptions to this rule are the specialty memories, like graphics (and RDRAM), where extra performance is provided at a higher cost. Even in this specialty niche, RDRAM is being pushed out by DDR. I gave a post (that was ignored, of course), a little while ago that described how it is that memory designers choose memory chips: "Rules for cost effective memory selection." #reply-13880098 Like everything else in engineering, it is all about delivering a performing product at the cheapest cost possible. RDRAM has higher system costs than its competitors, but if it was cheap enough, we would all adapt to it and use it. Is this going to happen? No. Since late last year, the chance RDRAM taking over has been zero. But assuming it did, RMBS would be a decent buy at its current price. The memory industry makes $30 billion of memory per year. 1% of that would be $300 million, and double that to include memory controllers, say $0.6 billion per year. RMBS would be quite a bargain at the current price if that were to occur. A lot of people who don't know the ins and outs of the memory industry are saying to themselves something like this: "Well, if Rambus has a 50% chance of capturing the memory market, then they are a bargain, so I think I will put some money on them." The problem with this line of reasoning is that Rambus doesn't have a 50% chance of taking over the memory market, it has a 0% chance. At one time it had some sort of a chance, but that was before the Camino delay last Nov/Dec. -- Carl