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To: Carl R. who wrote (44486)	3/28/1999 10:20:00 AM
From: Zeev Hed	Respond to of 53903

Carl, my 10% was not "Profit Margins", these were after tax bottom line assumptions, and frankly I think this is extremely generous.To achieve this type of a number they have to have in excess of 40% gross margins, it has been quite some time since that has happened in this segment. Even INTC, always having some very high margin products in their mix rarely achieves gross margins in excess of 52%. In the most recent quarter, MU achieved 32% gross margins on their semiconductor products, and that was in an environment in which they almost doubled bits shipped (90% increase), had stable pricing and reduced costs furiously. The semiconductor group performed superbly, but under the best of conditions they got to 32% gross margins, I think assuming 40% gross margin is thus very generous. You have to assume that their SG&A and R&D will stay at about the same levels that they are now (12.5% and 8.5% respectively), thus yielding at best 19% EBTI. If you add a tax rate of about 45% (higher in overseas operations) and whatever interest charges they'll have you will see that 10% after taxes profits is not only generous, it is probably not achievable. Similarly, I assumed in that "most generous case" 25% market share and I still cannot get better than $3.3/share as the most optimistic number in 2001/2002 time frame. Of course, I do not expect the "most generous" assumptions to be actualized, that was just an exercise, including the whole DRAM market reaching $40 Billions, but that is debatable. Zeev

To: Carl R. who wrote (44486)	3/28/1999 11:00:00 AM
From: wily	Read Replies (3) \| Respond to of 53903

Carl, What does this mean to you? Seems Samsung is pretty bullish on RDRAM. They must think the demand will be there to commit so heavily. Message 8558037 Japanese chip makers' wait-and-see attitude toward Direct Rambus contrasts with Korean rival Samsung Electronics Co. Ltd., which is ramping production to get a jump on the market. By year's end, 20% of Samsung's total DRAM bit output will consist of Direct RDRAM, jumping to 50% in the fourth quarter of 2000, according to a report from Morgan Stanley Dean Witter & Co wily