SAN FRANCISCO -- You can't buy love. That's what someone should have told Intel (INTC) - Get Report before it sunk $500 million into memory chipmaker Micron (MU) - Get Report last summer to speed up the adoption of Rambus (RMBS) - Get Report designs.

There's no love lost between Rambus and Micron.

Morgan Stanley Dean Witter


Warburg Dillon Read


Hambrecht & Quist

all rallied to Rambus' defense Thursday with ratings reiterations a day after Micron CEO Steve Appleton, citing continuing delays of Rambus technology, said in a conference call that Micron would adopt a technology that competes with Rambus' own. (Morgan and Hambrecht are both underwriters of Rambus.)

The criticism by Appleton and the rally by the analysts reflect a market divided over Rambus, a company that doesn't make chips but sells its memory-chip designs to others. Fans of the company believe Rambus and its designs will dominate the memory market, while critics harp on delays and overblown expectations of a brand new technology.

Asked on the call when Rambus chips would debut, Appleton bristled. "It's obviously public now that there have been delays -- considerable delays, I guess, from the perspective that when we looked at this two years ago people were talking about Rambus being a '97 product, then a '98 product, then a '99 product," he said. "And it looks like the amount of coordination and effort required to put Rambus into high volume production is not going to happen any time in the next several months so it is clearly something that will take place later this year and into 2000."

In response, Rambus CFO Gary Harmon says the current delays push back the schedule by just a few months. When Intel adopted Rambus designs in 1996, the schedule didn't call for roll-out until 1999. And as for the competing technology, "I don't think that will go anywhere," he says. "


was in the same position a year ago," he says. "Now they are very vocal in their support of Rambus. A year from now Micron will be too."

So hostile are the two companies to one another that Appleton and Harmon nearly came to blows at a party early last month at the San Francisco home of

BancBoston Robertson Stephens

analyst Dan Niles, according to separate eyewitness accounts from two people present at the party, who asked not to be identified. These partygoers told

that Harmon cornered Appleton and demanded that he speak more positively in public about Rambus.

Asked about the altercation, Harmon said, "We had an interesting conversation. Steve is an aggressive guy and he defended his position as I did for Rambus. But we shook hands after."

But boys from Boise are not easily threatened, apparently. Instead of endorsing Rambus on Wednesday's call, Appleton said memory designs are dictated by the desire of customers first, Intel second. "We are reacting to what the customer base wants," Appleton said. "And obviously we are reacting to what Intel is doing for their schedule because they are a key part of enabling any memory technology."

Micron, he said, is producing PC100 designs now -- chips based on a competing technology -- and is working to develop a competing Double Data Rate DRAM as well. "We will work on whatever comes along, whatever the customer wants," he said. "DDR is clearly a cheaper solution for us to manufacture and the performance is rivaling Rambus."

Rambus stock soared in the second half of last year, pumped up on estimates from

Cahner's In-Stat

that Rambus chips would make up more than half the memory market by 2001. Because Rambus makes no chips itself and merely licenses its designs for royalties, its business model predicts a huge revenue stream and little costs.

But by year's end, some fund managers and analysts were beginning to

doubt how soon and how much Rambus revenues would actually grow. The stock doubled between October and January, peaking at 109 1/2 on Jan. 11. It has slumped since, dropping to 62 1/16 Wednesday, amid

rumors that Intel was having problems producing Rambus chips and that equipment makers wouldn't have test equipment ready until the second half of the year.

Thursday, the stock rose 6% to 66 1/16 after Appleton's comments, a rally that surprised


analyst Dan Scovel. "There was nothing but bad news for Rambus," Scovel says. "This is the second time that Micron has said the costs suck." (Fahnestock is not an underwriter of Rambus.)

The stock could only have rebounded because Edelstone pounded the table, Scovel says. For his part, Edelstone, who maintained his price target of 110, says the previous drop in the stock had been based on "misperceptions." He wrote that Samsung and


(SNE) - Get Report

are both supporting Rambus and that Intel's schedule for deploying Rambus is on track.

Nick Moore, a fund manager with

Jurika & Voyles

, which has no position in Rambus, points out that while Appleton may hate Rambus, he doesn't seem to hate the money Intel has paid for Rambus support.

"Why don't they just give the money back?" Moore says.