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

To: Thomas P. Friend who wrote (4598)	6/13/1998 12:20:00 PM
From: Jeff Jordan	Read Replies (1) \| Respond to of 93625

DRAM Dynamic Random Access Memory is: Dynamic It loses it's contents when not refreshed (SRAM* doesn't) Random Access You don't need to read/write all the bits/bytes in succession Memory It remembers things DRAM needs about 4 times as much transistors as SRAM* so it's generally 4 times bigger or 4 times cheaper at any given moment. DRAM is also generally slower. Succession of DRAM technologies: DRAM ^ Dynamic Random Excess Memory FPDRAM* ^ Fast Page Mode DRAM EDO ^ Extended Data Output SDRAM* ^ Synchronous DRAM SDRAM* II ^ Synchronous DRAM with double data rate D-RDRAM ^ Direct RAMBUS DRAM SLDRAM ^ SyncLink DRAM RAMBUS The future trend (in 1998) as a technology for PC memory after DRAM, FPDRAM* and SDRAM*. See also: rambus.com lan-plus.com

To: Thomas P. Friend who wrote (4598)	6/13/1998 12:26:00 PM
From: MileHigh	Read Replies (1) \| Respond to of 93625

yes, the H&Q earnings revision down in 3/99 from 10 to 9 cents is interesting, seeing that we were expecting the start of a ramp up and therefore higher sales and EPS?? MileHigh

To: Thomas P. Friend who wrote (4598)	6/15/1998 7:48:00 AM
From: Shibumi	Read Replies (3) \| Respond to of 93625

I would appreciate it if someone would tell me where I'm going wrong in the following negative analysis of Rambus. A few positive disclaimers: I am currently long Rambus. Their technology and the patent portfolio they've put together is outstanding. The fall of the stock due to panic about Merced is ridiculous -- actually, the lower end of the 32-bit chip set will need Rambus technology much more than Merced since it's the 32-bit chip sets which have less cache with which to front the memory bus. The competitors to Rambus are all quick-fix patches around existing technology -- none has the legs to move to the kinds of transfer speeds that Rambus does. And finally, I'm convinced that Intel desperately wants Rambus to win -- as they continue to fight in a price war with their competition, the use of Slot 1/2 to increase memory speed while reducing their manufacturing costs on a per-device level by decreasing transistor budget (by removing/reducing the cache) is a no brainer. Thomas Friend has stated several times that his primary concern with respect to Rambus is that the DRAM market continues to shrink. In order to refute him, I did an analysis of this market. Here's what I found: 10/31/97 06/03/98 DRAM Market DRAM Market 1995 40.8 40.8 1996 25.1 25.1 1997 20.1 20.1 1998 25 14.5 1999 32.2 18.4 2000 41.7 24.9 2001 ---- 33.6 (Note: All data from the SIA website -- 06/03/98 numbers from a survey that SIA reported, numbers derived from growth estimates in survey). When H&Q did their analysis at the time of the IPO, it should be noted that they used for 1995 a number of $26B for the current DRAM market and that they projected a DRAM market of $62B in the year 2000. If we assume that Rambus will be able to maintain a royalty of 2%, and that Rambus penetration is 50% in the year 2000, you're left with a revenue stream from this royalty of $249M in the year 2000 versus $417M from the 10/30/97 SIA forecast and $620M from the original H&Q DRAM market forecast. Now...I understand that the DRAM market follows boom and bust cycles -- but what surprised me in this analysis was just how far the DRAM market had shrunk given the latest 1998 numbers. Given this, it appears to me that Rambus is a much more risky proposition than it was just several months ago when the best forecast for the DRAM market was $25B with growth in 1999 to $32.2B. Please someone tell me what I'm missing here.