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

To: The Prophet who wrote (72666)	5/12/2001 3:45:08 PM
From: pheilman_	Read Replies (1) \| Respond to of 93625

>Not a huge assumption. Toshiba, Elpida, Samsung, Intel, and Rambus have already said that RDRAM costs 20% more to make than SDRAM, and that will go down to 10% by next year. This is great, you are trusting Rambus to provide accurate cost estimates on RDRAM? Say, isn't that the same company just convicted of fraud. Not indicted, nor accused, but actually convicted. Is the drop to 10% premium based on the new design RDRAM part with just four banks. How are those data sheets coming along. As for the capital cost argument, buddy. Whether the DRAMurai have or have not geared up for RDRAM parts, the capital equipment cost of the new testers is included in the cost premium of RDRAM. As for the sophistry of my royalty argument. A 1.5% premium is always meaningful to a manufacturer in a low margin business. So, I visualize the DRAM factory, they are starting wafers of SDRAM/DDR down the line and then deciding after manufacture which way to bond the part based on market demand. Or, they can change out the line, and the testers and make RDRAM for a much smaller market. And what sets the cost for a piece of silicon? That would be the volume, higher volume, better yields, lower costs. So, DDR gets to piggyback on the SDRAM yield curve, RDRAM has to plow a new trail. And lets look at the empirical evidence. Nothing more empirical than a Fry's* weekly newspaper supplement: Cover-two cheap PIII (SDRAM) Page 2- portables PIIIs (SDRAM) Page 3 Macs- (SDRAM) also assorted video cards some with DDR and PIII/ Duron machines all SDRAM P 4,5-White goods and stereos Page 6-Assorted motherboards and Memory, SDRAM and 1.2GHz Athlon w/ DDR motherboard Page 7-Software Page 8- Handhelds (all using SDRAM) Back of the Business Section Friday Four High End Graphics cards all using either 32 or 64 MB of DDR memory. (What's missing? Why PSX2, and P4, and RDRAM. To be fair, a few PSX2 games are advertised.) What is the expected market for PSX2? Two chips per machine, times total expected number of machines (in Sony's final fantasy) of 25 million. 50 million parts, ever. And short term good news for Rambus, they get a royalty for the RAC included in the Emotion Engine. But, long term bad news, no other game machine in the pipeline uses RDRAM. And engineers will be taken out and shot for including a royalty forcing piece of IP in their parts. What is the expected market for P4 with RDRAM? Tough to judge, it is worth noting that the entire Fry's advertisement contained exactly 0 P4 products. *Fry's Electronics, for those not living in California, is a massive one stop shopping store for computer nerds, chips, parts, computers, and snack food. Each store has a theme, Aztec, Old West, Wavelets. The great part about shopping at these stores in Si Valley is that the aisles are filled with the actual designers of most of the product and you can get advice on purchases from true experts, a good thing 'coz the staff usually doesn't have a clue.