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

To: hdl who wrote (77552)	8/16/2001 3:45:09 PM
From: Bilow	Read Replies (1) \| Respond to of 93625

Hi hdl; Re: "bilow, rdram went from $300 to $100 very fast. Now in two weeks it dropped another 15% to $85. I assume it was $1,000 not that long ago. It could be $25 by end of year. At such low prices, won't people buy rdram and not be concerned that it is 4x as expensive as other memory. They could save $20 by buying cheaper memory, but they can buy for $25 what recently cost $400." Well, production of RDRAM has quit climbing. If RDRAM really does drop to $25 from the current $100, that means that Rambus' royalty revenues from RDRAM are going to drop by 75%. That could put a world of hurt into Rambus investors. I've repeatedly explained that RDRAM is on the way out. In addition, I'm on record as predicting that RDRAM RIMMs will eventually stabilize at about 50% over the price of SDRAM. That would put it (according to my 256MB figures) at around $25 per stick. *In other words, I agree with your prediction that RDRAM RIMMs will get to about $25 each.* I agree completely. So why won't these low prices stimulate RDRAM consumption to new highs? The reason is that RDRAM causes the motherboard to also be significantly more expensive. From the point of view of total system cost, RDRAM doesn't do to well. But like I said before, one possible reason for buying RMBS right now is that with the peak production of RDRAM occuring right now, the price for RDRAM will be dropping through the floor over the next 3 months. That will convince a lot of losers that RDRAM is the next mainstream memory. The pricing information is obvious, while the production information is more difficult to discern. So there could be a lot of people become convinced that RDRAM is finally becoming mainstream. If so, they could run up RMBS' stock price. But long term, such a price increase is just a gift to the short sellers. They need your uptick. -- Carl