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

To: Don Green who wrote (72473)	5/10/2001 2:29:18 AM
From: Dan3	Respond to of 93625

The strategy used by Rambus appears to be pretty clear: Get the "Rocket Docket" Eastern District court to rubber stamp the patent examiners conclusion, then use that precedent when facing the much tougher fights against Infineon in their home court in Germany and Micron's experienced and successful litigation group. The notion that Rambus could walk away with between a quarter and a third of the profits of the international memory industry, using patents covering a standards that were filed after those standards had been semi-publicly specified by an industry standards group was always a bit far-fetched. But they managed to get a patent examiner to buy off on their application, and the payoff would have been incredible. But now, rather than facing their toughest challenges with that first easy win to give their case a minimum of credibility, they are instead starting out with the burden of a decisive loss as a precedent. This stock used to be a 10 to 1 long shot with big possible payoff to justify investing in it. Now it's closer to 100 to 1, and the payoff is smaller since that first big loss is going to be increasing costs and reducing the value of future settlements - the momentum is gone, and Rambus's bargaining position is permanently weakened. Whatever Rambus was worth before this trial began, it's worth about 1/10th as much now. Dan

To: Don Green who wrote (72473)	5/10/2001 3:02:53 AM
From: NightOwl	Respond to of 93625

Aren't the 1st Qtr royalty checks due on June 30? I seem to recall something about them being delayed by a quarter to allow retrospective calculations based on actual sales numbers. I would expect that the reaction of the licensed fabs will come to light between now and then. The question of royalty refunds is not cut and dried. RMBS will have arguments to stand on and there's enough at risk for them to raise them. My guess is that Elpida would be the first to get serious on the question of refunds. Samsung has some alternatives to consider because of their RDRAM advantage and the dependence of RMBS on its RDRAM production. But of course the real question remains what will INTC do and when will they do it? I may be wrong but I think the MU trial has been split with the JEDEC/Fraud issues being tried first. I think it may start late in the fall. But it appears that INTC won't have its own DDR chip set by them. VIA says they will have their P4/DDR chip sets out in the 2nd half. Looks like they could gain more market share. The real problem here for RMBS and the fabs alike is that the dynamics of this semiconductor market will certainly work against any possible growth in DRDRAM sales. DDR has a clear path to many applications whereas DRDRAM doesn't. As a result DRDRAM could never reach the potential volumes of DDR. And that means that the optimum production costs for DDR will always be less than the cost of making DRDRAM. Once PS2 sales drop and INTC gets any DDR chip set to service the P4. The DRDRAM niche is going to get very very small. Barring some intervention by the Borg, I estimate the share price by 1/31/02 as struggling to maintain a $5 level. In the end that will be quite impossible for current management. They have shown no inclination nor ability to survive as a niche design house. More importantly, their corporate "Good Will" is a negative drain on any sales efforts. I doubt that they will have a reason to exist by year end '02. 0\|0