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Technology Stocks : SILICON STORAGE SSTI Flash Mem

SSTI 6.190

-0.2%

Nov 28 9:30 AM EST

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To: Ausdauer who wrote (1003)	10/3/2000 12:25:05 AM
From: hueyone	Read Replies (1) of 1881

re: Those who have followed SSTI realize that licensing revenues had even started to drop this year. Aus, in August I spoke with Jeff Garon, CFO of SST, about royalty growth. I posted the results of our conversation at your hangout at the time, but here is my summary of Mr. Garon's comments again: Companies wishing to use SST's technology pay a significant one time license flat fee at the time of signing of the agreement. Then they pay royalties per piece as the SST technology is implemented. Revenue from both these sources is rolled in to the "technology licensing" category on the income statements. In 1999, SST made a number of agreements recognizing one time license revenue for use of its technology. The per piece royalties from these agreements are only now starting to kick in a significant manner and are growing steadily. Had royalties been separated from the one-time license fees in the income statements, you would have seen a very nice growth chart for royalties. Even so, the technology license fee category doubled from Q1 to Q2. Look for continued increases in in the technology licensing category going forward due to ramping royalties. Mr. Garon also pointed out that SST will continue to do a great deal of profitable business where license or royalty fees do not accrue to SST. In fact one of SST's biggest opportunities involves making SuperFlash Firmware Hub products for Intel chipsets. In this case, Intel licenses SST to produce the firmware and SST is the licensee rather than the licensor. Yet this is a giant step forward for SST in its mission to make SuperFlash technology the dominant technology in low density flash. So again, there are many ways for this company to capitalize on its intellectual property, and simply isolating license fee growth is not the only way to gauge the success thereof. Message 14252430 Best, Huey

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