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

To: NightOwl who wrote (69390)	3/30/2001 3:50:52 PM
From: Don Green	Read Replies (1) \| Respond to of 93625

Mitsubishi, NEC work to reopen quake-damaged fabs By Paul Kallender, EE Times Mar 30, 2001 (11:06 AM) URL: eetimes.com TOKYO — A 6.4-magnitude earthquake that struck south of Hiroshima on March 24 caused greater damage to a Mitsubishi Electric system-on-chip fab and a major NEC DRAM fab than was initially reported, but it spared other semiconductor plants. On March 29, Mitsubishi assessment teams were still "working furiously" to restore production at the Saijo fab on Shikoku Island, about 30 kilometers south of the earthquake's epicenter. That belied an earlier company statement that the 24,000 8-inch wafer facility would be back online within a couple of days of the quake. The March 29 statement estimated the plant would not resume operation for 10 more days. Five other major Mitsubishi plants in the region were unaffected, a spokesman said. In Hiroshima, NEC's 128-Mbit DRAM facility was only at "just over 50 percent capacity" at press time, although the company was maintaining its promise to resume full production within 10 days of March 26. The fab, which also produces 288-Mbit Rambus DRAMs, has a nominal production capacity of 35,000 8-inch wafers per month. No structural damage Both companies said neither plant had sustained structural damage, although neither company would explicitly confirm or deny damage to production lines or equipment. Other NEC fabs have boosted capacity to meet the shortfall in DRAM production, and the company will have no problem meeting its April production quota, a spokesman said. Despite the importance of the sidelined NEC fab, analysts discounted the impact of the earthquake on DRAM availability and pricing, because the market is saturated with product. DRAM prices have plummeted recently, as the down cycle explores new depths. And assuming the stated estimates on inspection and repair costs are correct, the short-term production interruptions will not have much of an impact on either company, analysts said. "If an earthquake had to occur, this probably was a decent time since the industry is still heavy with inventory," said Brian Matas, an analyst with IC Insights (Phoenix). "The DRAM market is soft enough that taking one fab — even a big one — offline for a few weeks will probably be a good thing," said analyst Steve Cullen at Cahners In-Stat Group (Boston). But Sherry Garber, DRAM and flash-memory analyst at Semico Research (Phoenix), said the temporary closures "may change the perception," if not the reality, of DRAM availability. In September 1999, when a 7.6-magnitude quake hit Taiwan, supply and demand were virtually in balance, and prices rose when fabs suspended production. "The panic button was pushed, and suppliers played that card to its fullest," said IC Insights' Matas. But prices quickly fell back in line.

To: NightOwl who wrote (69390)	3/30/2001 6:37:44 PM
From: Bilow	Read Replies (3) \| Respond to of 93625

Hi NightOwl; One point (which maybe you have overlooked) is that the Infineon trial is on the "rocket docket". So Rambus' best strategy at this point is to either delay, delay, delay (like the judge in the Micron case accused Rambus of), or sign an agreement with Infineon that doesn't bust their current royalty stream. In any case, there is no question in my mind that it is in Rambus' best interests to put off the decision as long as possible. When the decision goes against Rambus, the memory makers that have already signed agreements will at the very least cancel the agreements, and at the worst sue for return of royalties already paid plus damages. Any of that will force Rambus to issue a profit / revenue warning, and that will bring in the class action shareholder lawsuits. Until then, Rambus management needs to have the stock high so they can continue to dump shares on mom and pop. It's unrealistic to suppose that RDRAM still has a chance of keeping DDR (and DDR-etc.) from becoming the next mainstream memory. With the current RDRAM, the price adder is too high. With RDRAM-lite, the price adder is still too high, and in addition, it is too late. But who knows what Rambus management really believes. I've seen management that was totally disjoint from reality many times in the past. People have a marked tendency to believe their own BS. -- Carl P.S. Have you been having a good laugh at the Rambus longs complaining about the company's legal representation?