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No. of Recommendations: 2
Across the chasm? Please explain your reasoning. They hold a miniscule market share, and dubious technical advantages. Source after source quotes that DDRAM will be the way of the future. If you are betting on the litigation to gain your revenues, you have quite a bit of confidence in the legal system (might I remind you of the OJ trial).

Yes, SDRAM can be made to be as fast as RDRAM. It is true. We expect that for the next couple of years SDRAM will dominate the server scene. RDRAM is more expensive to produce right now, and although it should come down, it will be some time before it is as cheap as SDRAM.

The thing is, how do they make SDRAM as fast as RDRAM? It's not rocket science. They just go parallel instead of serial. More signals running at a lower overall speed equals fewer signals running at a higher overall speed.

For servers, this makes a lot of sense. You need huge amounts of memory.

For other applications, where you need large amounts of memory but want lower signal count, Rambus makes sense. It takes (and I may be a little off here) 33 signals to add a new RDRAM channel. It takes 132 to add a new SDRAM channel.

RDRAM works works extremely well in applications where you want to be able to reduce chip-count as well as the number of signal paths. Sony is using it in the PlayStation II, and I don't think they would even consider it unless it actually saved them money to use it. The folks at Sony are not chumps.

Are these dubious technical advantages? I don't think so, but you are free to disagree with me. In fact, why don't you take up a short position in the stock? The price is really high right now, and if the long-term situation for the company is that bad, it is going to drop big time sooner or later. You could make a lot of money. Let me buy you a beer!

The Register is known to be openly biased against Rambus, and has been for some time. Even with the Fayad review, they took the statement out of context. Fayad, in the same review, says some really good things about Rambus, the company. He believes that the recent run-up is due to a short squeeze, and recommends getting out - for the short term. How he knows that it will not go up further remains a mystery, especially given the fact that he believes the long term outlook for the company is good.

If Fayad is wrong (about the long-term outlook), then I am wrong too. I think this company has just started its run-up. It will likely be a bumpy ride, but you pays your money and takes your chances. If it were a clear-cut no-brainer, the stock would already be priced at either $10 or $1000 a share.

I do not believe that we are "across the chasm" yet, but I do see that we have made significant headway in that direction over the past month. Stock price aside, the situation is clearing up, and in a few more months we will have a much clearer understanding of the whole situation. By then, though, it may be too late to buy. On the other hand, it is never too late to short!
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