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

To: Bob Tate who wrote (15006)	2/2/1999 9:31:00 PM
From: MileHigh	Read Replies (1) \| Respond to of 93625

EBN's Daily News Digest Smart Modular sees opportunity for Rambus competitors By Matthew Sheerin Electronic Buyers' News (02/02/99, 03:41:15 PM EDT) SAN FRANCISCO — While it is building a complex infrastructure to support the memory market's transition to the Direct Rambus interface, module maker Smart Modular Technologies Inc. believes there could be strong demand for competing technologies and plans to support them. "The transition [to Rambus] is going slower than had been expected, so I think there is a window of opportunity for the others," said Ajay Shah, chairman and chief executive of Smart Modular (Fremont, Calif.). Shah spoke today (Feb. 2) at the NationsBanc Montgomery Securities financial conference in San Francisco Shah said Smart was working closely with DRAM manufacturers supporting Double-Data Rate, SDRAM and SLDRAM chips. Shah indicated, however, that Rambus will be widely supported following a transition that he called "the most important in the history of the memory market." "Rambus is not just another technology change — it will force the change of the entire infrastructure," Shah said. He noted, for example, that DRAM makers will be forced to devote 15 percent to 20 percent of a wafer fab's costs to preparing back-end operations, such as packaging and testing, for Direct Rambus. As for Smart, "we continue to be prepared for Rambus," he said. Serving DRAM companies that outsource module manufacturing continues to be a growing portion of Smart's business, Shah said. Smart is also making a big push in the logistics arena, supplying top PC manufacturers, such as Compaq and IBM, with modules of all makes and sizes on a build-to-order basis. Smart increasingly ships products directly to its customers' customer, said Shah, noting that Rambus receives some 2,000 order a day, and ships to 15,000 different sites. Noting that the PC-memory-module business generates relatively low profit margins, Shah said Smart is maintaining strong ties with communications OEMs such as Cisco, Lucent, and 3Com. A relatively new area for Smart Modular is the embedded computing market, which currently represents just 3 percent of the company's revenue but represents a "tremendous" opportunity, Shah said. Smart Modular's revenue totaled $714.7 million in its 1998 fiscal year, up just 3 percent from 1997 due primarily to continued weakness in memory prices, the company said. Net income grew to $51.5 million from $45.4 million.