Rambus technology vindicated
Shares in the DRAM developer climb following an announcement that industry heavyweights are embracing the company's core technology.
Rambus' stock, which has been on roller-coaster ride since going public in May of 1997, rose nearly 20 percent after the company said that both Dell Computer and Compaq Computer confirmed they would ship PCs that use Rambus' Direct DRAM technology beginning next year.
Additionally, Rambus announced that Intel began testing the technology, which allows a computer's central processing unit to share information from memory chips more quickly and in higher volumes.
"It's a milestone along the way to Intel's use of Rambus in the PC," said Jim Handy, a memory chip analyst with Dataquest. Despite the enormous promise of Rambus' Direct DRAM, he said, the product--akin to a pipe that funnels information from a computer's memory to its CPU--is used only in low-end workstations and video games.
In addition to the promise of its technology, Rambus' high-profile initial public offering was helped in large measure by its backer, Kleiner Perkins Caufield & Byers, a high-tech venture capital firm that has taken other high-flying stocks--including those of @Home and Amazon.com--public.
Brian Matas, vice president of market research at IC Insights, agreed that yesterday's announcement is an important right of passage for Rambus.