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

To: GVTucker who wrote (70899)	4/25/2001 11:51:11 AM
From: Dave B	Read Replies (2) \| Respond to of 93625

GV, There is no indication that there was any formal agreement between INTC and MU to ramp RDRAM. There may have been mention of this between the parties, but not keeping your word is hardly new in the corporate world. Unethical may be too strong a word, but below are some sample articles at the time when Intel made the investment (and, actually, the third article below states that there was a contract). Regardless of whether or not it was a formal agreement, the expectation was there -- Intel needed RDRAM production to ramp to drive costs down. If nothing else, I doubt Intel will trust Micron quite as much in the future and be as willing to work with them, whereas their trust in Samsung has probably increased significantly <G>. Dave ---------------------- Why Intel put money into Micron. INTC (Company Business and Marketing) Electronic Buyers' News, Oct 26, 1998 p1(1) By Robertson, Jack Full Text Intel Corp.'s $500 million investment in Micron Technology Inc. is prompting a fair amount of armchair quarterbacking, as observers explore the range of market dynamics that such a large cash infusion could unleash. The investment, which grants Intel the rights to 6% of Micron's stock, is overtly directed at winning Micron's support of Direct Rambus DRAM, an emerging architecture that Intel is positioning to serve the high- end PC market next year. A Rambus licensee for some time, Micron nevertheless had kept its Direct RDRAM development program on a slow track. Because the technology is forecast to enter high-performance-computing markets first, the Boise, Idaho, company was content to watch from the sidelines until Rambus chip sales reached volume levels. ---------------------------- Intel secures RDRAM supply through Micron. Electronics Times, Oct 26, 1998 p9(1) By Dempsey, Paul Full Text Intel is looking to secure the supply of low cost RDRAM-based memory following its $500m cash investment for an equity stake in memory manufacturer Micron Technology. Under the deal, Intel has secured Micron's backing for its favoured Direct RDRAM technology, the proprietary microprocessor-memory interface system, developed by Rambus. Micron is set to use the cash to upgrade more of its output capacity to an 0.18 micro m process, as well as for further cost-efficiencies and the addition of RDRAM. ------------------------------- Intel buys into Micron for RDRAM assurance. (Company Business and Marketing) Electronic Engineering Times, Oct 19, 1998 p8(1) Full Text Santa Clara, Calif. - Intel Corp. is investing $500 million in Micron Technology Corp. to ensure development of Direct Rambus DRAMs at Micron (Boise, Idaho). The move gives Intel a 6 percent stake in Micron, which has a Direct Rambus DRAM license but which has been among the strongest supporters of the SL-DRAM. Capital-investment cutbacks by Asian DRAM vendors in the wake of that region's financial crisis have posed a threat to Intel's road map for moving the performance-desktop sector over to Rambus, an Intel spokesman said. "You can't just turn on one of these programs and get immediate results. These high-performance memories are important to our overall program, and this investment is a message to the DRAM industry that high-speed memories are important to the PC industry." The contract between Intel and Micron stipulates that the funds will go toward the development and supply of the Rambus DRAMs, and the Intel spokesman said there is "no confusion between the two companies' on that point." A Micron spokesman said the company will continue to pursue alternative DRAMs.