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

To: Skeeter Bug who wrote (74864)	6/25/2001 10:38:32 PM
From: tinkershaw	Read Replies (1) \| Respond to of 93625

Skeeter, I agree with you regarding price/performance. It is up to new software and new applications to be developed, like Windows 95, to create new must have value with higher processor speeds and bandwidth. No doubt about it. I've stated before that if this does not happen the PC market will go the way of the television market. Little to distinquish between product, very slow growth, and basically be stymied into lower and lower margin products. Intel and AMD will become little more than picture tube companies. This scenario also destroys much of the software industry which relies on consistent product upgrades. If they can't keep creating the need to upgrade, and under your scenario they will not be able to, these software companies are also in a world of hurt. For these reasons, I do think new software products will be developed which push the cycle ahead yet again. We've always had lulls and much slower roll-outs for each new cycle, yet in the end the product upgrade cycles have come around. We will just have to wait and see. What has me most concerned is this estimate of a DRAM market for 2001 of only $14 billion. I'm certain that is the low-end of the estimates, but that is staggering. It is a crash of the greatest proportions should that play out. With such a small market, at least for the next year or two, it doesn't matter if RMBS gains 100% market share or not. That is a very puny market. A very large shakeout is afoot. As much as Bilow may hate to admit it, the evidence is there. Those DRAMs that bet against RDRAM are being shaken out. Perhaps someone could be so kind to put side by side the positions of the RDRAM firms: Samsung, NEC and Toshiba vs. the DDR firms: Micron, Hyundai and Infineon. There could not be a greater contrast in financial stability between the two camps. If Bilow wants to stick with his story that is fine. But due to the very high fixed costs of the DRAM industry, firms like Micron, despite reporting large inventory build-ups for DDR, are still churning out DDR as quick as they can. As long as revenues exceed average costs, even if it is selling at a loss, it is the rational economic thing to do. It is also what leads to an industry shakeout. Given this fact in the market, as Bilow likes to overlook, does it make any sense at all for the other DRAM players, like Samsung, to crank up their own DDR production just to add to the glut when they are making a mint on RDRAM with little evidence of any build-up up RDRAM inventory. In fact with just the opposite concern that production needs to continue to ramp to keep up with RDRAM demand, even in this historic DRAM crash? Skeeter, I've gotten onto a Bilow thing here again. Certainly you may be correct. I take the position that applications will come out compelling people to upgrade. But either position is perfectly reasonable. What is not reasonable is Bilow's picture of the marketplace. Read him for what it is worth, but it seems to me to be worth about as much as an article on the DRAM industry written by Bert McComas. But hey, only one man's opinion. Tinker