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Rambus offers Hyundai cheapo shares to make more chips

Will Hyundai take punt in DRAM Desperation Derby?

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A report in US technology title Electronic Buyers' News said that Rambus has offered mammoth Korean memory combination Hyundai 30,000 of its shares at the knockdown price of ten bucks each if it steps up its production of its memory for the marketplace. Hyundai, which was forced to merge with LG Semicon by the South Korean government last year, already has options to buy 25,000 Rambus shares at $10. There is a condition, and that is that Hyundai churn out ten million additional memory chips for the Rambus platform, formerly called Direct Rambus. That suggests that the ...err... incentive is intended to give Rambus technology a leg-up. Rambus' intention is clear. The price of RIMMs for PCs is still way higher than many people are expected to pay, and it must get the price down if it is to achieve significant market share, particularly given the widespread interest and low cost of double data rate (DDR) synchronous memory and PC-133 synchronous memory. In the next 10 days, Intel is expected to sample its Solano II chipset, which will include support for PC-133 memory, after it was forced to accede that was what its customers, the PC vendors wanted, in autumn last year. Samsung, another massive Korean memory combine, also has options to buy one million shares that it cannot yet exercise, EBN reports. However, whether Hyundai will take the Rambus bait is unclear, given the fact that share prices can go up as well as down. The Rambus share price, in particular, has demonstrated the Marjorie Daw seesaw effect over the last 52 weeks. The RMBS share price closed at $89 5/8 last Friday, but has seen a 52 week high of $117 1/2 and a 52 week low of $51 1/2. So the question here is how much it costs Hyundai to produce and sell the memories for the Rambus RIMMs. Is it worth taking a punt on the share price staying high, Rambus doing well, and Hyundai raking it in? And how well will Rambus do, considering that both AMD and Intel now have SDRAM strategies? Rambus will next report quarterly earnings on the 18 January. The EBN story can be found here. ®

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