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

To: Zeev Hed who wrote (44714)	6/16/2000 8:50:00 PM
From: Earlie	Read Replies (1) \| Respond to of 93625

Hi Zeev: A few pennies worth of observation on the "memory shortage" that the N.Y. boys keep mentioning in their "research". I'm out in the field a great deal as you know. Maybe I'm talking to the wrong people, but whenever I bring up the "memory shortage", my contacts just chuckle. As well, execs at a couple of the big box builders have also noted that they can't see it either. Last year, the N.Y. analysts spent the whole year calling for a memory shortage that never occurred. Yield growth last year was historic and more than made up for the bit growth and they missed this completely as they were focussed on the "lack of new production plant" issue. This year,while memory yield improvement isn't quite up to last year's (at least so far), it's still pretty darned good. Also, there are new fabs coming on stream this year (particularly in Taiwan, at least if the island doesn't sink into the sea.) Flash has been the only area in memory where real shortages have occurred this year, and with everybody and his dog moving in, it won't be long before there is a glut in that area (and it isn't all that big a percentage of the whole memory arena in any event). With corporate PC buying all but dead (and for the first 3 quarters of 1999, it wasn't bad), and this spring's big consumer buying binge (coincidentally it occurred just as the NAZ peaked) now petering out, it's difficult to conjure up HOW a big memory shortage will occur. Perhaps we will have a solid autumn PC sales cycle, but that would surprise me. The whole darned situation looks saturated to me, and to many of the folks out there that do the selling. Business isn't buying so heaven help us if the U.S. consumer decides to take a borrowing holiday, and the first four months numbers show a hint of this. IMO, if there was a real shortage, memory prices would reflect this. As memory prices have more or less just oscillated in a range for the last several months, it smells more of good marketing than anything else. Of course I may be just looking in the wrong places. Your comments re RMBS prospective earnings are similar to mine,....... well at least in general terms (g) Best, Earlie

To: Zeev Hed who wrote (44714)	6/18/2000 9:39:00 PM
From: Jdaasoc	Read Replies (1) \| Respond to of 93625

Zeev: There is also the note from Tate that DRAM will eventually be only 35% of total revenues I guess is that of the other 65%, memory controllers for SDRAM and DDR RAM will make up a good portion of it. Tate was non comittal about going after VIA Systems, who have 1/2 of PC controller market, after being prompted by caller on conference call. Any additional licensing agreements will depend greatly on the potential licensee needing existing RMBS IP not SDRAM/DDR IP that the courts will eventually settle. I think that any other DRAM manufacturer that has made an investment in producing RDRAM will settle with RMBS fairly shortly about SDRAM and DDR in order to keep RMBS licenses active. It is the people like Hitachi and possibly Micron, they still haven't made any RDRAM yet, that will risk going to court for a long drawn out battle. Last but not least, I think that RMBS will do another non cash expense for more warrants at this quarter earnings announcement just like last quarter. My calculations say that RMBS has another 7.2 M options to expense at $ 2.5 per share (4 M for Intel, 2 M for management, 1.2 M for DRAM manufactures). Those 7.2 M warrants add up to $ 560 M or about another $5.60 on top of $1.70 loss reported earlier. These guys will try IMO to bite the bullet on these non cash charges ASAP in order to look profitable when the big earnings start to roll in in future years. My bet is that the DRAM manufacturers warrants will be this quarter. I am not sure but if I heard Tate right the first 3 DRAM manufacturers to reach certain milemarkers will get warrants. My guess is that Samsung, Toshiba and NEC are the ones in line for the warrants. This charge will be good enough to cause a pullback just like last time. This pullback should create a new buying opportunity when next DRAM licensing agreement settlement is achieved. I agree that RMBS will go much higher. john