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Refresh Your Memory on These Tech Stocks

We discuss our picks and pans in the semiconductor memory space.

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A paradigm shift is under way in computing. Ten years ago, computers sat on desks--now, they slip into a back pocket. This shift toward ultraportability, made possible by innovative technologies for storing data, holds the potential to create enormous wealth. However, the complexity of the subject matter, combined with the tendency for popular press pundits to toss around a bewildering alphabet soup of acronyms and jargon, sometimes makes it hard for the nonspecialist to follow developments in this interesting area. We thought we would do a quick review of memory technology and provide our thoughts about which firms will be the winners and losers in the move to ultraportable computing.

A Bit of Technical Background
The legacy model of computing has a hard-disk drive sending blocks of data to a "data corral" made up of dynamic random access memory semiconductors. DRAM then shuffles the data off to the processor lightning fast whenever the processor calls for it. Hard-disk drives have this problem: Because they are mechanical (basically working on the same principal as Edison's phonograph), they use a lot of power and are slow. Solid-state DRAMs have a different problem: While they're fast, they lose their data as soon as the power is switched off. As long as we remain tethered to a wall socket, this hard-drive-DRAM tag-team arrangement works fine. However, with people increasingly wanting to send e-mails from the back of a taxi and watch full-length movies on their mobile phones, we believe that for portable devices, the days of this legacy model are near an end. If you have any doubt about this, compare one of the first hard-drive-powered  Apple (AAPL) iPods to a new solid-state iPod Shuffle: It's like comparing a 1980s-era  Motorola (MOT) shoe-box phone to a RAZR!

Erik Kobayashi-Solomon does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.