Hello Voltaire,
Interesting read on RMBS,
community.metamarkets.com
Intel rebates box-makers, to ramp RDRAM Post rated (max 5)
By toocheerful (rating 3.54) on 00:17 09.09.00
Intel this afternoon announced that it will offer P-4 boxmakers substantial rebates to offset the temporarily-higher cost of RDRAM. This will of course help to ramp RDRAM production, offering MMs a larger, more rapidly-growing market with economies-of-scale improving; and for boxmakers it will remove a pesky obstacle on a path most have shown they prefer in the first place.
Apparently Intel intends with this one stroke to do all of the above, as well as undercut VIA's threat of a DDRAM-based P4 chipset, and for competitive market reasons, optimize consumers' experience of the P4 by making sure it has "RDRAM Inside." Link to the rebate story is:
investor.search.com
THIS IS A STATEGIC MOVE FOR INTEL WHICH GREATLY RE-ENFORCES RMBS, where RMBS has been an haven of relative stability (!) in this last week's semiconductor storm. (You don't believe me, look at the charts!) The semis generally suffered here
because of uncertainty stirred up by confliciting
analysts' views. During this period, RMBS was only modestly affected, even though the market was digesting the MU lawsuit news at the same time.
These events occur against a background which I personally find somewhat contrived. The various analysts' "semi debate" seems to me unreasonably based on spot market for products which will be rapidly declining in their shares of the memory market. How rapidly?, is the big question, and the answer will be controlled in significant measure by HOW FAST RDRAM COMES INTO USE among OEMs. Intel's subsidy announced today is likely to affect that.
The acid test here will be to sit with two computers, one a P4 with RDRAM running a 400+ Mhz bus, one a 133 Mhz bus machine with ANY memory, take your pick, both connected to real broadband internet, a few months from now. If the P4 wows the magazine reviewers and first high-end consumers, as I believe it will, the whole context of discussion of the boxmaker's and semi's futures, may shift. (If you think I exaggerate about effects in the memory market as early as Q1, 2001, imagine 5000 end-users waxing rhapsodic about their P4s on 15,000 message boards.) I think this is likely to be one of those sea-change events, because the P-4 will offer realization of many of the borderline sci-fi images and ideas which have been in people's minds for years now. RDRAM is not incidental to this realization. The p4 runs on 7 cylinders, not 8, without it.
The most realistic estimate, I believe, is something like RDRAM 40% of memory production by 2004. For my money, the enthusiasm which will be generated by the "full, high-speed, broadband experience" is discounted in analysts present projections, and I think in six-month time frame semis will fly, based on RDRAM projections revised upward. Events will tell.
And --- laugh if you will --- it won't be too long, in my opinion, before RMBS is seen as safe haven within the semis and a hedge against the vicissitudes of any particular MM. My opinion is affected, of course, by my views that
1.) Today's Intel rebate annoucement seals the fate of a high-speed DDR as an alternative to RDRAM: what was unlikely, is now just plain not going to happen. RDRAM is now as good as established for the vast majority of high-speed machines, including desktop PCs. The rumored street price for the new P4s is something like $2,400.00. On introduction. (No price quoted formally by Intel, as I understand, and I would image w/ only 128 of RDRAM included.
2.) MU's lawsuit strategy is a major blunder. Their intention apparently was to deter other MMs from signing with RMBS for SDRAM and DDRAM pending distant litigation outcome: But as the ANONYMOUS POSTER here a couple of weeks ago outlined, what Micron has really done is create a world-class deterent that will prevent box-makers from committing to DDRAM, which
hangs under a cloud of litigation, while all MMs, even Micron, ALREADY have licenses for RDRAM. MUs "timing strategy blunder" is compounded by their having a weak case on the grounds they allege, and their having assumed additional legal burdens by seeking a declaratory judgment, rather than defending a
royalty suit.
The last bit of drop --- say, 1.3 of today's 2.6 pt. loss --- in RMBS today I attribute to automated sell-programs kicking in in the last half-hour. I think we will see that instantly retraced on Monday morning.
My apology to any who feel these several lengthy posts w/ news, etc., are just hyping RMBS. Point out my errors, dern' it!, and help me save my money now! As it is, my money is on the bet that, within six months, RMBS will be occupying an elevated and somewhat unanticipated position, that of a haven of stability, in the esteem of investors. I think Intel's announcement today makes nearly certain, what yesterday was merely very likely. Those are strong words for anything in this market. But most investors are now used to the idea that traditional notions of safe haven are, perhaps, a little more risky than well-chosen even-if-volatile stocks. |
