Intel Bunnies Rambusted?

[Dennis Robert Redmond]

Intel is burning up cash getting Pentium 4's noone really wants out the
door, and they're also, apparently, more or less funding its RDRAM
suppliers: <http://www.siliconstrategies.com/story/OEG20010227S0069>. For
those not up on their silicon, RDRAM is a new memory architecture pushed
by Rambus, while the majority of suppliers out there still produce SDRAM.
RDRAM seems to be a very nice technology, but cost-competitive only when
you max out your memory bandwidth (the gory details:
<http://www6.tomshardware.com/column/00q3/000719/> and for a recent
update, see <http://www6.tomshardware.com/cpu/01q1/010208/index.html>).
Intel's stock options to senior execs are pretty lush, capital spending is
going to $7.1 billion, and the success of RDRAM is just not a done deal
(DDRAM may yet turn out to be a cheaper solution).

Why does any of this matter? Because Intel is the prototypical
hard-charging bubble-stock of the 1990s, which cashed in on marketing
muscle, subservient Pacific Rim suppliers and a near-monopoly technology
which allowed it to garner a 31.2% pre-tax profit margin in 2000 (no,
that's not a typo -- that's *thirty-one* percent). Put another way, if
even mighty Intel is feeling the lash of falling returns, then the Wall
Street Bubble is in deep, deep trouble.

-- Dennis