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No. of Recommendations: 17
1. Older DRAM technologies are pretty much commodities, I think? Is this new DRAM market a discontinuous technology that in the bowling alley or tornado? I understand that Rambus has patents on proprietary standards for new DRAM's technology and that their stock has risen rapidly of late, but am not sure how to judge the phase of market development?

RDRAM is something of a continuous discontinuous-innovation. It looks continuous because all the same software works on the new box. It is actually discontinuous because (A) it uses microwave transmission-line type technology to transfer data faster than traditional lumped digital circuits can, and (B) because the underlying memory architecture requires a fundamental redesign to work this way. Don't let the "discontinuous innovation" rule throw you too much - this technology will be necessary for the next generation of Intel's microprocessors.

As I understand the definition of tornado, Rambus is not fully into that stage yet, but it appears to be approaching rapidly. Rambus has stated that it expects 100 million RDRAM chips to ship this year, and production only really started ramping in the last quarter. Nonetheless, they appear to be well on the way to meeting the goal.

2. Is Rambus the confirmed Gorilla of this market, or are there other Gorilla candidates?

Rambus owns the patents. Hitachi tried to challenge but then backed down when all other manufacturers declined to join them in the lawsuit. All DDR and SDRAM appear to be covered by Rambus patents as well. Intel (a well established gorilla/king) appears to be betting its future on this technology, investing its own cash into memory makers to help them ramp up, and designing some of its future products to use RDRAM exclusively. There is still some doubt in the market (or the stock would have hit $200 by now), but the baby gorilla appears to be maturing rapidly.

3. Is Via just a Chimp working with another Chimp (AMD), and hoping to develop a relationship with Intel, or are they also a Gorilla candidate?

Not to upset the AMD fans, but in GG terms, AMD and VIA are chimps. It could change, but not the way things have been going lately.

VIA has yet to prove it can deliver a superior product at a lower cost than Intel (or even a superior product at any price). AMD has a good product as far as I can tell, but they have chosen their partnerships poorly, and they don't seem to have the long-term vision that the gorilla Intel can afford. They have bet their future on DDR, a product that is good for one generation of processors at most before being completely obsolete, a product which is still not on the market despite the "fact" that it is simpler and cheaper to produce (according to the press releases - we can't buy a DDR PC yet), and a product that we now know Rambus will collect even higher royalties on than it collects on RDRAM.

AMD obviously has some top notch engineers, but their management could use a good swift kick in the butt. They had a chance to really one-up Intel before the P4 debut, but with every new day they miss another chance, and pretty soon it won't matter.

No, VIA isn't a gorilla. They don't appear to be in danger of becoming one any time soon.

-JasonX




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