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Strategies & Market Trends : Point and Figure Charting -- Ignore unavailable to you. Want to Upgrade?

To: Bwe who wrote (12482)	1/9/1999 7:30:00 PM
From: Al Serrao	Respond to of 34809

Bruce, think of the RMBS story as an INTC problem. INTC the tech leader of our times almost at a standstill because of its own success. What if they made chips that were so fast the rest of the computer couldn't handle it. Who'd buy it? As INTC moves up the ladder in performance they need a solution for the remainder of the computer ( the bus ) to handle the speed of INTC's new generation of chips. Enter RMBS who's technology will speed up the rest of the computer by a factor of 10. Their technology is lienced to the memory makers who pay RMBS a royality ( no real estate, no equipment to manufacture, etc). Their business is purely the technology. Among competing technologies they have been choosen by INTC as the new standard. But this is not the end of INTC's problems. There was and still is the possibility that would not be enough RDRAM chips to meet demand to ensure the success of the new generation of INTC chips. It costs huge sums for the chip makers to gear up and change over to the RMBS technology. So to insure that the RMBS standard will succeed, INTC recapitalizes MU so that there will be a sufficent supply of new RDRAMs. RMBS will proably not begin hitting on all cylinders for another two years but their first generation will make its way into high end servers this year. Beginning in another year earnings should begin to explode. What I find even more interesting is the statement by Pres & CEO Geoff Tate in the annual report: "Rambus technology mentioned above combined with the use of current Rambus interface technology should result in a diverse group of applications coming to market in addition to PC main memory and video games such as arcade games, networking equipment, digital video/TV receivers, and multifunction perpheral controllers for use in fax/copier/scanner/laser printers." Bruce, I have simplified the story and there is a great deal more to it than I can relate. Furthermore, I am not a computer engineer so please do your DD and remember RMBS PE is fast shooting toward 400. Hopefully, future earnings will bring this number down to reality. Best regards and I hope this helps old friend. P.S. An interesting footnote to keep in mind, some of the Board members of RMBS are very close to INTC.