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

To: Don Green who wrote (21279)	6/1/1999 11:29:00 AM
From: Estephen	Read Replies (1) \| Respond to of 93625

Looks like everything is getting sold off today.

To: Don Green who wrote (21279)	6/1/1999 11:45:00 AM
From: Tom Warren	Read Replies (3) \| Respond to of 93625

According to official statements by IBM no more than two weeks ago they are exiting the mainstream of dram market. Given they are apparently going to focus on embedded dram (where rambus technology is irrelevent) the article in electronic news is probably an editorial conclusion, not new news from IBM. Read the article below, and try to come up with a logical reason for IBM to say anything about rambus two weeks later. IBM seeks more profitable memory segments By Will Wade EE Times (05/13/99, 5:32 p.m. EDT) EAST FISHKILL, N.Y. — IBM Corp. is shifting its focus away from commodity memories but not abandoning the market entirely, a spokesman said Thursday (May 13). "Our business strategy is to focus on more advanced logic and more profitable memory technology such as SRAM," the spokesman said. "Although DRAM has a less important role and is contributing a smaller percentage to our total revenues, we don't plan to eliminate it entirely." The comments came after a wire report quoted IBM chief executive officer Louis Gerstner as saying he plans to ditch the DRAM market within five years. While IBM seems intent on staying the course in the memory game, Dataquest Inc. memory analyst Jim Handy suggested that dumping the commodity product would be a good idea for the company. "They have a leadership position in the custom logic market, but they can easily acquire all the DRAM they need on the open market," he said. "It would be sensible for IBM to avail themselves of everybody else's capacity." Handy's forecast predicts the overall DRAM market will not be profitable this year, and will see only slim profits next year. IBM and other European and Taiwanese memory manufacturers would like to see their DRAM lines turn a profit, but this puts them up against the South Korean and Japanese DRAM giants, which Handy said are focused on the very long term and currently are still competing solely for market share. "Profits are what will make IBM happy," Handy said, "But the profits [from DRAM] for the next few years are nothing to write home about." Embedded DRAM is partly responsible for IBM's decision to stay the course with DRAM, and the company has recently begun to promote its trench cell technology, which can be used to place up to 16 megabits of memory onto a logic die. "Our DRAM program is important to us because it has helped us develop our embedded DRAM products," the IBM spokesman said. However, analyst Handy predicted that the embedded DRAM market will also be weak. "There will be fewer and fewer applications for which embedded DRAM will be a cost-effective solution," he said.