Intel pushes RDRAMs with rebates

By : |September 13, 2000 0

Left with few alternatives, Intel once again climbed on the Rambus bandwagon
with the announcement that the chipmaker will give computer makers rebates if
they use RDRAM memory chips in Pentium 4 computers. Earlier this summer, Intel
indicated it was moving away from its support for the new high-speed memories.
Rambus meanwhile, filed a complaint with the US International Trade Commission
against Hyundai.

With the rebate, Intel hopes to accomplish two key objectives: push the
adoption of high-speed memory and give computer makers a strong financial
incentive to make computers with Intel P4 processors rather than competing with
the Athlon chips from AMD. By reducing the gap between the cost of regular DRAMs
and RDRAM chips, Intel expects that computer makers are more likely to opt for
an Intel-based Pentium 4 with RDRAM than an Athlon system with cheaper DRAMs.

Intel said its plans to issue rebates to PC makers who use the Rambus chips
in Pentium 4 computers. "We are planning a program to help with the initial
ramp of the Pentium 4 to ensure there’s memory available to enable manufacturers
to hit their price points," said Intel spokesman Mike Sullivan.

To date, computer makers have been reluctant to adopt RDRAMs, which are more
expensive than regular DRAMs. But RDRAMs offer a vastly higher performance in
the exchange of data between the microprocessor and the memory. High-end
processors cannot achieve the overall system performance improvement using the
133 MHz rate at which traditional DRAMs transmit data.

Earlier this year, Intel reduced its commitment to Rambus technology when
slow demand for RDRAMs kept their production cost too high for mass adoption.
Intel said it would support other technologies for increasing the bus speed. But
with much of Intel’s near-term success riding on the Pentium 4, which will run
at 1.4 GHz or faster, it desperately needs computer makers to standardize on
high-speed memories and RDRAMs are the only available option. To achieve the
performance improvements customers are expecting in a P4 system, Intel is
literally forced to push RDRAMs in the absence of a viable short-term
alternative. Initial P4 computers will be available at around $2,400, enough for
system houses to absorb the cost of the RDRAMs. To make up for the cost
difference, Intel said it will offer rebates to computer makers who use RDRAMs.

Rambus meanwhile, announced it has asked the US International Trade
Commission (ITC) to conduct an investigation whether Korea’s Hyundai is
importing DRAM and SRAM memory chips into the United States that allegedly
incorporate Rambus’ patented technology. Rambus also filed similar patent
infringement lawsuits in Germany and France against Hyundai. Rambus is seeking
injunctions to halt the sale of the chips.

A trial in Germany is anticipated to start in February 2001, while a French
court this week ordered the seizure of samples of Hyundai SDRAM and DDR SDRAM
memory devices as it starts its investigation into Hyundai’s infringing
activities.

"Intellectual Property is our business and we will not hesitate to
protect our IP when it is being used without a license," said Rambus chief
executive officer Geoff Tate.

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