Rambus Article:
techweb.com
Mitsubishi May Follow Oki Into Rambus Fold
(07/28/00, 5:25 p.m. ET) By Mark Hachman, TechWeb News
Rambus is filling up its SDRAM stable by corralling second-tier vendors.
The controversial memory maker on Friday announced a licensing agreement with Oki
Electric, and Mitsubishi confirmed that it, too, is talking with Rambus (stock: RMBS)
about a similar deal.
In the past six weeks, Rambus has made separate, parallel arrangements with Toshiba
and Hitachi (stock: HIT).
"They're going after the smaller players, definitely," said Sherry Garber, an analyst with
Semico Research, Phoenix. "It's possible they want to gain momentum ... but they're also
targeting one or two big players, too."
According to Semico Research, Toshiba and Hitachi ranked sixth and ninth in 1999
DRAM sales, at $1.49 billion and $500 million, respectively. Oki was 10th, with about
$450 million in DRAM revenue.
If Rambus continues its pattern of licensing SDRAM to second-tier vendors, Mitsubishi
and Fujitsu Microelectronics deals may soon follow Oki's. Mitsubishi and Fujitsu ranked
seventh and eighth in overall 1999 DRAM sales, Semico said, with about $880 and $550
million in revenue, respectively. Infineon (stock: IFX) ranked fifth in 1999 DRAM sales, at
$1.63 billion.
Cecil Conkle, assistant vice president of DRAM marketing at Mitsubishi Electronics
America, Sunnyvale, Calif., said Rambus has approached his firm about negotiating a
license.
"They have been to talk to us, and we are in negotiations, and that's all I can say at this
time," Conkle said.
A spokeswoman for Fujitsu Microelectronics -- Fujitsu's U.S. semiconductor subsidiary in
San Jose, Calif. -- said she was unaware of any similar talks with Rambus.
Semico, however, believes Fujitsu and Mitsubishi may withdraw from the PC DRAM
market.
Avo Kanadjian, vice president of marketing for Rambus, said the company did not
necessarily seek out Hitachi and Toshiba because of their place in the overall DRAM
market. The Hitachi deal was signed to settle a much-publicized legal dispute between the
two firms, and Toshiba and Oki were two of several firms that proactively approached
Rambus about negotiating a license, Kanadjian said.
Toshiba has licensed Rambus technologies for a decade, so a strong relationship was
already in place, he said.
Oki's licensing agreement closely resembles the Toshiba and Hitachi deals. Oki will pay
Rambus a fee for the technology used in crafting SDRAM, double-data-rate SDRAM,
and DRAM controllers. As it has done previously, Rambus will charge Oki higher royalty
rates for its use of DDR memory, making production of Direct Rambus DRAM less
expensive to manufacture, at least on a royalty basis.
According to Kanadjian, the Oki deal is retroactive to April 1, as with the Toshiba and
Hitachi agreements.
Under the standard terms of its licensing agreements, Rambus requires licensees to tally
up the amount of DRAM (and, in this case, logic controllers) that use the licensed
technology and report the figure at the end of the quarter. Rambus then receives the
royalty payments during the subsequent quarter.
This means Hitachi, Toshiba, and Oki will make royalty payments to Rambus this quarter.
Kanadjian said other firms continue to explore licenses with Rambus, including logic and
DRAM firms, but he would not comment upon the number of firms or whether Rambus
would announce similar deals in the near future.
"Our preference has always been to settle amicably," Kanadjian said. |
