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: Don Green who wrote (47549)	7/19/2000 4:34:03 PM
From: Don Green	Respond to of 93625

Rambus Falls on Concern About Royalties, Competition (Update2) 7/19/00 12:28:00 PM Source: Bloomberg News URL: cnetinvestor.com Mountain View, California, July 19 (Bloomberg) -- Shares of Rambus Inc., a computer-memory chip designer, fell as much as 8.7 percent on concern that rivals may enter the market and that some chipmakers won't pay royalty fees to license its patents. Rambus fell 6 1/8 to 95 3/4 in late trading. Earlier it touched 93. The stock has risen more than fivefold this year, making it the third-best performer in the Russell 1000 Index. Toshiba Corp. and Hitachi Ltd. agreed last month to pay Rambus royalties for a broader range of memory-chip designs, avoiding legal battles over the patents. Investors are concerned that other memory-chip makers such as NEC Corp. and Micron Technology Inc. aren't likely to follow suit, said Drew Peck, an analyst at SG Cowen Securities Corp. ''People are buying this stock for its potential, and that's where there might be some changing sentiment,'' said Peck, who has a ''neutral'' rating on Rambus shares. Two of the world's largest computer-chipset designers, Via Technologies Inc. and Acer Laboratories Inc., said they will oppose an Intel Corp. plan to exclusively use a Rambus memory chip standard for Intel's new Willamette processor. Both Via and Acer said they would like to use an alternative to Rambus's standard for chipsets, called double-data rate, or DDR. Rambus's patents for chips are used by No. 1 computer-chip maker Intel to speed software applications. Rambus chip designs speed information from one chip to another in personal computers and video-game consoles. Intellectual Property Mountain View, California-based Rambus said yesterday on a conference call that the number of people working on intellectual property for the company is expanding and that it's in talks with a number of other companies over royalty payments it should be getting. The company has more than 85 U.S. patents, President and Chief Executive Geoff Tate said. ''We have put together a substantial intellectual property team, and we expect to sign additional licensees over time,'' he said. That means legal costs could rise and ''there's not likely to be a huge amount of offsetting revenue,'' Peck said. UBS Warburg analyst Gregory Mischou this morning reiterated his ''strong buy'' rating on the stock, writing in a report that Rambus's agreements with Toshiba and Hitachi, as well as the introduction this fall of Intel's Pentium 4 chip and Sony's PlayStation 2 game console will help sales rise. ''The long-term competitive landscape is evolving in Rambus's favor and near-term the available market is expanding,'' Mischou wrote. Yesterday, Rambus said net income rose to $4.6 million, or 4 cents a share, in the quarter ended June 30, from $2 million, or a split-adjusted 2 cents, a year earlier. The results matched the average expectations of four analysts polled by First Call/Thomson Financial. Revenue rose 67 percent to $17.8 million from $10.6 million.