Intel investors, some big news today on the Rambus front. Toshiba will license DDR technology from Rambus. I think this news is a net-positive for Intel. One reason, of course, is Intel has warrants to own a significant part of Rambus, and RMBS shares is soaring on the news. But perhaps, more importantly, it raises the "costs" of producing DDR technology (a rival to Rambus technology) due to royalty payments and the messy lawsuits, lawyer fees, etc. if the other big memory players continue to challenge Rambus in the courts. Rambus definitely won a big victory today, and this perhaps will result in more memory players producing Rambus technology, which, of course, is in Intel's best interests!
Joey
Rambus surges on analyst upgrade, Toshiba deal
By Ian Fried
Staff Writer, CNET News.com
June 16, 2000, 10:15 a.m. PT
URL: news.cnet.com
update Shares of memory chip company Rambus soared today after a brokerage upgraded the stock and Toshiba agreed to license the company's
patents for use in standard memory.
In early afternoon trading, shares were up $29.31, or more than 51 percent, to $86.63 after Morgan Stanley Dean Witter analyst Mark Edelstone
upgraded the stock to "strong buy." The company recently split its shares 4-for-1.
Under the deal announced late last night, Toshiba will pay a licensing fee and royalties for today's standard memory chips and double data rate (DDR)
memory, a standard competing with Rambus' approach to become the next standard in the PC market.
The Toshiba deal is potentially significant in that it could lend credence to a theory proposed by Rambus that nearly the entire memory industry owes
the company royalties. Rambus has alleged that patents it filed in 1990 give it a right to collect royalties from manufacturers of synchronous DRAM
(SDRAM), which became the primary type of memory used in PCs during the past 10 years.
Earlier this year, Rambus sued Hitachi, saying its standard memory chips infringe on Rambus patents; it also indicated that more lawsuits could be filed.
Rambus doesn't actually make chips, but rather licenses its technology to other semiconductor companies. Its primary business has been trying to drive
its own approach, so-called R-DRAM, into the marketplace. That effort has run into a variety of hurdles, however.
"We believe our Rambus memory interface is the best solution for the majority of the market," Rambus chief executive Geoff Tate said in a statement.
"Developing and marketing the Rambus memory interface has been and remains our top priority. But we are willing to license our IP for other memory
interface solutions as well."
UBS Warburg analyst Greg Mischou said the fact Toshiba is willing to license the technology strengthens the case against Hitachi and could increase
the odds that other memory makers will license Rambus' patents.
"It greatly increases the likelihood that others will follow suit," Mischou said.
Rambus is expected later this afternoon to discuss future directions for its own memory design at an event in Santa Clara, Calif. |
