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

To: MulhollandDrive who wrote (6207)	8/13/1998 12:23:00 PM
From: jopawa	Read Replies (1) \| Respond to of 93625

bp, I love the potential, but when a stock trades on potential it is subject to wild fluctuations (see a 3 mo, 6 mo, or 1 year chart). I personally am very nervous about this market, consequently even more nervous with companies like RMBS. RMBS seems to explode up on good news, and slides back until more news comes out. In a strong market for tech, I think it would continue higher on speculation. In a weak market it could easily revisit 40. John

To: MulhollandDrive who wrote (6207)	8/13/1998 2:48:00 PM
From: Scrapps	Read Replies (2) \| Respond to of 93625

Will Big Three dominate world microchip market? By Yoo Choon-sik Thursday August 13 12:02 PM EDT SEOUL (Reuters) - After years of sliding prices, the time is drawing closer for computer memory chip makers to consider seriously whether to remain in the industry. Three to four will possibly survive, with others opting to focus on niche businesses, thinning out the ranks of the crowded dynamic random-access memory (DRAM) industry, analysts say. The squeeze on profit margins is likely to get tighter in the years to come, exacerbated by Asia's slumping economies, they add. The projected slump in demand from Asian economies that up until last year were boasting some of the world's fastest growth rates will worsen an already severe global over-supply of memory chips, leading to a new cycle of weak prices. Two companies have already vowed to exit -- Siemens AG plans to close its 15-month-old semiconductor plant in Britain and Texas Instruments Inc (TXN - news) (NYSE: TXN) is to sell its memory chip business to the U.S. firm Micron Technology Inc (MU - news) (NYSE: MU). ''TOP THREE'' WILL DOMINATE WORLD MARKET Analysts see Micron, South Korea's Samsung Electronics Co and Japan's NEC Corp (NIPNY - news) as the most likely survivors. ''A clear distinction between winners and losers is emerging, and within two years, the world's DRAM market will be dominated by the Big Three -- Samsung, Micron and NEC,'' said Yoshiharu Izumi, analyst at SBC Warburg Japan. The recent deal to buy the memory chip business of Texas Instruments will boost Micron into a strong player in the next few years. Current leader Samsung will likely retain its leadership. It has the advantage of accumulated know-how, efficient management skills and a stable supply of funds from other affiliates of the Samsung Group to which it belongs. Analysts say NEC's strong non-memory chip business, such as ASICs (applied specific integrated circuits), will allow it to continue its massive investment in DRAMs, buttressed by a strong technical edge and marketing. Those three companies and Texas Instruments accounted for 45 percent of the global DRAM supply in calendar 1997. OTHERS WILL TURN TO NON-MEMORY CHIPS Many of the current DRAM makers will probably opt to turn towards niche areas, such as foundry business or the non-memory chip industry, to remain afloat, analysts say. HSBC Securities Japan analyst Naoki Sato said he expects other makers, like Toshiba Corp., Hitachi Ltd (HIT - news) and Fujitsu Ltd to continue DRAM production but mainly for internal use and maintaining their skill. Among the three South Korean chipmakers, LG Semicon Co. and Hyundai Electronics Industries Co. are expected to keep producing DRAMs but for only a small portion of the world market or even for specific vendors. ''Intel Corp (INTC - news) (Nasdaq: INTC) wants to secure a stable supplier of chips and is expected to increase purchases of Rambus DRAM chips,'' said Joo Dae-young, an analyst at the Korea Institute for Industrial Economics and Trade (KIET). ''For that, the possibility is high for LG Semicon to become a stable supplier of the chips in exchange for capital injection by Intel,'' he said, referring to the on-going negotiations between the two on a stake investment. ''BIG DEALS'' MAY SHAKE OUT SOUTH KOREAN MAKERS Analysts in Seoul said they were sceptical about the proposed idea of two or three large conglomerates, also called chaebols, swapping business lines. Since his inauguration in February, President Kim Dae-jung has urged the country's top chaebols to accept ''Big Deals'', as the business swaps are called in the country. The most widely talked about scenario has the LG Group handing over its chip making business to the Samsung Group, Samsung selling its car making business to the Hyundai Group and Hyundai its petrochemicals line to LG. But complicated ownership relations within each group and expected quarrels over how to fairly assess assets could turn those Big Deals into no deals, analysts say. ''It's very unlikely any big deal would be realised. There are many problems, some existing and some expected to emerge,'' said KIET's Joo. LG, HYUNDAI TRYING TO STAY ALIVE LG Semicon and Hyundai Electronics are expected to seek ways to keep afloat through self-rescue efforts, even if that means falling from the ranks of industry leaders. Hyundai has already sold its U.S.-based customised chip subsidiary, Symbios Inc, to LSI Logic Corp. (LSI - news) (NYSE: LSI) and spun off its personal computer division. It has also cut off a big chunk of its considerable workforce through early retirement packages, and sold off its stake in Globalstar L.P. LG Semicon has accumulated a technological edge in production of Rambus DRAMs by adopting Rambus Inc. (RMBS - news)'s (Nasdaq: RMBS) technology format, and will probably do its best to join hands with Intel which has been testing Rambus DRAM chips. Hyundai also wants to strengthen its telecommunications business, anticipating an opening up of a lucrative business with North Korea, analysts add. Hyundai has been spearheading investment by the capitalist South in the communist North. (Reuters/Wired)