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

To: Barry A. Watzman who wrote (49572)	8/13/2000 3:18:29 PM
From: NightOwl	Read Replies (2) \| Respond to of 93625

Thank you very much for this reply. Its analysis is more than I expected. But... I take your answers to be: 1. I would be very interested to know how you see the industry producers coping with a system in which they must pay real cash for IP at times when they are selling at a loss? Presumed Answer - They will pay and in the end that's all that matters. (?) 2. And then there is the corresponding problem they have of needing agreement on a "standard" for design in order to actually produce this commoditized product that has become nearly as indispensable as cows milk. What do you see the arrival of the RMBS SDRAM/DDR IP claims doing to the memory standards activity of JEDEC? Answer - Regarding JEDEC and the need for standardization, this is largely irrelevant also. And thus the arrival of RMBS IP will not effect its work? While its always dangerous to reduce someone else's thoughts, I believe the above is a fair rendering. I think your first point may well be the correct conclusion. As stated yesterday, in the end, perceptions of profit and loss will likely be determinative of this dispute. But it also appears to me that the semiconductor world of 2000 is a far cry from the seminal market of the 1960's or 70's, in which period I assume the TI dispute and settlement was formed. Neither they nor their respective governments or economies can afford to allow them to simply "stop" making this "milk" that we are increasingly addicted to. Profitable or not it is simply indispensable to all of us. Companies like RMBS as well as Mosaid and RMTR, or indirectly even TI, depend on these Fab houses for a substantial element of their values. In the case of RMBS and RMTR its close to 100 percent. Yet they can rightly claim that without their contributions this commodity market would also cease to function. In my view this creates a potential for tension not unlike the labor management disputes of the late 19th early 20th centuries. Its certainly true that these same "tensions" have been there from the outset. And its also true that the market place has developed ways of "coping". Merger, consolidation, diversification, acquisition, exclusive market agreements, tying arrangements, re-design, blackballing, legislation, ...offers that can't be refused...; most attempts to "resolve" this natural tension that you can name, lawful, unlawful or "grey market" have probably been tried at one time or another. Most, ...but not all. The RMBS "experience" indicates to me that none of these "solutions" has been adequate as far as many of the "players" in the market are concerned. But as with the labor v. capital schism things don't remain constant, and the incredible "$" amounts involved, both profit and loss, place huge pressures on some of our "players" to change their relative positions. As the RDRAM bus itself has shown, this market can be subjected to both "evolutionary" and "revolutionary" change. I see no reason to assume that this characteristic would be limited to the production line and drawing boards of the industry. My "instincts" tell me that, unlike the period of the TI dispute, today's costs are simply too large to avoid a new and "revolutionary" solution. Which brings me to my second question and answer. I see JEDEC's activity, in the memory arena at least, as being driven even further from the forefront of "standard" setting. I don't see its work and the work of the Patent Office as being compatible on an External vs Internal type of analogy. The scope and complexities of IP just don't lend themselves to that clear a line of demarcation in my Mom & Pop view. Assuming JEDEC's Fab membership truly believes that RMBS "stole" whatever IP it claims to have from portions of their work, it appears to make little sense for them to continue to risk development of new "platform" IP without a higher level of protection for those "claimed" developments. There are many ways they can address such a perception, if indeed they harbor any such. Some of those methods could be "evolutionary" and others could be "revolutionary". Some would result in greater power by JEDEC. Others would result in even less. But if nothing else RMBS will force an examination of those methods by its non INTC/RMBS membership. And again, in the end I think the "result" for JEDEC and everyone else, including us, will be a greater degree of change than we anticipate simply due to the far larger amounts at issue than was the case when TI was the big IP on the block. Perhaps it won't become apparent until the next downturn in the semi business cycle, but I assume that a substantial change will come. 0\|0