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

To: Don Green who wrote (47552)	7/19/2000 5:33:22 PM
From: Don Green	Respond to of 93625

Rambus Stk Dn 7%; Some Analysts Worry About Intel Tie By RICK JURGENS W.S.J. July 19, 2000 PALO ALTO -- Rambus Inc.'s (RMBS) stock price was down 7% Wednesday after the company posted third-quarter net income that matched analysts' estimates but as other news fueled doubts about the company's future revenue prospects. Shares in the Mountain View, Calif., developer of technologies used to speed connections between memory and logic semiconductors recently were priced at 95 3/16, down 6 11/16, or 6.6%, on composite volume of 4.6 million shares. Average daily volume is 17.2 million shares. The company was not immediately available for comment. On Tuesday Rambus posted third-quarter net operating income of $4.8 million, or 4 cents a share, matching the analysts' consensus. But Drew Peck, an analyst with SG Cowen & Co., said that Rambus' stock price is highly volatile and reflects investors expectations of the company's prospects to use its intellectual property rights to collect licensing revenue on a "significant chunk" of the dynamic random access memory business. Rambus' stock reached a 52-week high of 127 on June 23, up from a low of 14 5/8 in September. Several developments in the past 24 hours fueled doubts about Rambus' future prospects, Peck said. Comments by Rambus executives in a Tuesday conference call that asserted broad rights to DRAM licensing payments cut two ways, Peck said. On the one hand, they raised the prospect of greater licensing income growth but also sparked concerns about the cost of litigation to assert those rights, he said. Some analysts also found reason to worry about Rambus when they listed to an Intel Corp. (INTC) conference call Tuesday. Peck and Joseph Osha, an analyst with Merrill Lynch & Co., heard a note of equivocation about Intel's commitment to use Rambus technology in comments by an Intel executive during the conference call Tuesday. License payments from makers of the main memories for personal computers are important in Rambus' business strategy, and penetration of that market depends on Intel's cooperation to develop chip specifications, according to Rambus' securities filings. Paul Otellini, an Intel design executive, said Tuesday that Intel could in the future evaluate non-Rambus technologies for use in the memories of lower-price-point personal computers, an Intel spokesman said. "Rambus continues to be our primary memory DRAM technology ... for desk-top processors," the spokesman said. "The position hasn't changed." Mark Edelstone, an analyst for Morgan Stanley Dean Witter, said concerns about Rambus' future licensing revenue are unfounded. The company has intellectual property rights that will ensure that it receives licensing revenue even if other technologies are used by Intel and other chipmakers, he said. Wednesday's stock price decline reflected broad weakness in the stock prices of semiconductor companies, he said. SG Cowen's Peck and Merrill's Osha also cited another piece of potential bad news for Rambus: a report published by Electronic Buyers' News Tuesday that Via Technologies Inc., a Taiwanese chip maker, plans chipsets to support Intel's next-generation Willamette processor. So far, only chipsets based on Rambus technology have been licensed by Intel for use with the Willamette, the magazine said.