Intel to Back Alternative to Rambus Chips

Ending months of speculation, Intel (INTC Quote) embraced a low-cost alternative to Rambus-based (RMBS Quote) memory chips.

Intel said at the Intel Developers Forum in Palm Springs, Calif., late Wednesday that it will support PC133 SDRAMs in the first half of next year. The PC133 is a memory chip seen as a stopgap measure to chips using Rambus designs. Some companies have been critical of delays and high costs of Rambus chips. Intel's announcement will make it easy for Rambus critics to embrace an alternative while still working with chipsets made by Intel.

Intel is facing growing competition in memory chipsets, or devices that connect a computer's memory to its processor. By the time Intel's chipsets come out, they will be six months behind competitor Via Technology, a Taiwan-based company that has PC133 chipsets on the market now.

Rambus isn't likely to penetrate the low-priced PC market until 2002, according to data from Intel. Many in the semiconductor industry have said Rambus can't dominate the industry without penetrating the budget PC sector.

Intel emphasized it isn't abandoning Rambus. It is still planning on producing parts for low-budget PCs next year, and is hoping that market will develop.

"Rambus DRAM still provides a much more capable platform," Intel spokesman Pete MacWilliams said. Until now, Intel has been adamant that it would support only Rambus in its attempt to move the memory industry to the costly but fast design. But only recently has it realized that the industry is moving regardless toward PC133 SDRAM, which is made by Micron Technology (MU Quote) and Korea's Samsung.

"A key part of the decision," said MacWilliams, "is that we're finding that PC133 just happens. It is not a lot of work or cost for DRAM vendors."

That wasn't the case when Intel last evaluated the technology in the first half of 1998. MacWilliams told TheStreet.com that Intel has since been evaluating another Rambus alternative, double data rate DRAM, but doesn't plan to support it. But in a press conference later, MacWilliams said he would not rule it out.

The launch of Intel's Rambus-based chipsets is scheduled for Sept. 27. Rambus closed down 1 3/4 at 95 3/4 and Intel closed up 1 1/4 at 83 7/16.

-- Marcy Burstiner

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Specialty materials maker Dexter (DEX Quote) has a lot of stuff going on. The company said industry consolidation and rising offshore production prompted its decision to sell its printed wiring board materials segment. The unit generated $43 million in sales last year. Dexter also said it will restructure its specialty polymers and nonwoven materials units and close its magnetic technologies facility in Richardson, Texas, a move that will eliminate 60 jobs. Severance costs as well as the cost of moving production from Texas to another facility will result in a third-quarter charge of $2.6 million, or seven cents a share. The costs would be more than offset on a year-to-date basis by a first-quarter gain, said Dexter.

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In other postclose news (earnings estimates from First Call; earnings reported on a diluted basis unless otherwise specified):

Earnings/revenue reports and previews

AEP Industries (AEPI Quote) reported third-quarter earnings of 40 cents a share from continuing operations, in line with the single analyst estimate and up from 21 cents a year ago.

Tech Data (TECD Quote) reported second-quarter earnings of 54 cents a share, in line with the 16-analyst estimate and lower than 55 cents a year ago, excluding a gain.

Mergers, acquisitions and joint ventures

MLC Holdings (MLCH Quote) inked an agreement to acquire Centura Bank's (CBC Quote) technology leasing unit CLG for about $37.5 million in cash and stock.

Warner-Lambert (WLA Quote) bought $2.5 million of Ligand Pharmaceuticals' (LGND Quote) common stock and set a research and development deal for estrogen reception. The agreement with Warner's Parke-Davis division will focus on developing small molecule compounds with the potential to combat diseases affected by the estrogen receptor, including osteoporosis, cardiovascular disease, breast cancer, and mood and cognitive disorders. Ligand may receive up to $13 million in research funding through September 2002 in addition to product milestone payments and royalties.