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Kingston to spend $75 million to promote Rambus

The memory module manufacturer plans to spend approximately $75 million to make sure small PC makers aren't scared away from the Pentium 4 by the high cost of Rambus memory.

Memory module manufacturer Kingston Technology will spend approximately $75 million to make sure small PC makers aren't scared away from the Pentium 4 by the high cost of Rambus memory.

Kingston's marketing fund will likely be one of a number of rebate and marketing programs aimed at greasing the skids for the Pentium 4, Intel's newest PC processor, scheduled to debut Nov. 20. Under the program, Kingston will essentially give rebates to small PC manufacturers and computer dealers who build Pentium 4 systems containing Rambus memory.

"The program is here to make the memory modules more affordable," said Wai Szeto, vice president of strategic business development at Fountain Valley, Calif.-based Kingston. "RDRAM (Rambus dynamic random access memory) is far from being low-cost."

Until the middle of next year, PC makers will have no choice when building Pentium 4 computers but to use Rambus memory. But Rambus memory is still far more expensive than standard computer memory, called synchronous dynamic random access memory, or SDRAM.

Kingston, of course, has a vested interest in making RDRAM more attractive to system makers. The company does not make memory chips. Instead, it packages memory chips into larger frames, or modules, which then get inserted into PCs or servers. By breaking down resistance to Rambus, the company hopes to boost its sales.

"We have a lot to gain or lose depending on what direction the market takes," Szeto said. "We would like to see the PC market continue to grow."

The exact amount and nature of the payments will vary over time, Szeto said, although most of the money will be spent over the next six to nine months.

In September, Intel confirmed a rebate plan under which the company will give $70 to major PC makers for every Pentium 4/Rambus system they make this year. By contrast, Kingston will target smaller "white box" manufacturers, which remain fairly popular overseas and with small-business customers in the United States.