Today saw the next in what will be a continuing series of announcements from Rambus regarding royalty payments for the current standard memory SDRAM and the highly touted memory, DDR, along with royalty payments for the controllers for these memories - and not to forget, a one time payment called a license fee. Today's announcement is with Oki Electric, a $5.6B Japanese company who are the world's 10th largest DRAM supplier. So now we have three Japanese companies who have agreed that the currently most widely used memory, SDRAM, and the highly touted competitive memory to RDRAM, DDR, are both IP products of Rambus technology and require a license and payment of royalties.
This is a MUCH bigger story than the market has reacted to as I write this. RMBS is 71 5/16 + 4 5/8 right now. It was as high today as 74 1/2 ... so far. The market continues not to understand the implications of the three agreements. What the agreements mean is that Rambus has said ALL of the SDRAM, the current standard memory, the DDR memory which is just ramping up to compete with RDRAM, Rambus' very own (undisputed) memory and all the controllers that go along with this REQUIRE A LICENSE FROM RAMBUS. And 3 players have agreed to this WITHOUT A COURT FIGHT. This is THE ENTIRE MEMORY MARKET going back to 1995 when SDRAM was introduced. Rambus could, if they wanted to, demand royalties for all that was produced by all the world's memory manufacturers from 1995 to date. Those who sign with Rambus the fastest for these new licenses will have the lowest royalty rates and the shortest back periods to deal with. Toshiba agreed to back pay royalties to 4/1/00 because they were the first to sign.
There's a lot of negotiating going on with the other DRAM companies - any one of which will be brought to agreement at any time.
RDRAM memory and what share it will have this year, next year and so on is no longer the big story with Rambus - even though the market reacts as if it is.
The big story is the entire memory market. |
