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Technology Stocks : Rambus (RMBS) - Eagle or Penguin
RMBS 101.61+2.8%Dec 5 9:30 AM EST
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To: unclewest who wrote (27186)8/16/1999 6:21:00 PM
From: grok  Read Replies (1) of 93625
 
RE: <would you mind explaining why rmbs says they get 1.7% on rdram and 5% on everything else? the ceo says dram revenues are going up 50x. isn't that the 1.7% part? come to think of it just tell rmbs to stop mentioning that 5% everything else thing it just confuses me.>

Rambus has separate contracts for dram and for everything else with everything else in three categories: Processor, ASIC, and ? (can't remember the third one). The royalties can be and are different for each contract. Each contract has a range of royalties with the range for "everything else" being higher than for dram and could be as high as 5%. But it is negotiated with each customer. That is why the number is always vague since Rambus doesn't want some customers to know that they are paying more than others are paying. I would expect that Sony will pay way under 5% on Playstation II because they were in a strong negotiating position due to the success of Playstation I and the next to (someday) get costs very low for the consumer business. Maybe some people with poor negotiating position or skills and low volumes might pay as much as 5% but I wouldn't use that as a standard for "everything else" since it is probably way too high. But who knows since it is a carefully guarded secret.

Also it should be understood that one drdram channel can drive many drdrams but the royalties on the logic chip are only paid once regardless of how many drdrams are on the channel. (This doesn't matter for Sony since there'll only be one drdram per channel but it will matter for PCs and servers since there'll be many drdrams per channel.
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