Hyundai Files Lawsuit Against Rambus Over
Patents (Update2)
By Ian King
Seoul, Aug. 30 (Bloomberg) -- Hyundai Electronics Industries Co., the world's
second-largest computer memory chipmaker, said it sued Rambus Inc.
alleging some of the semiconductor-design company's patents are illegal.
Hyundai said ``certain patents owned by Rambus Inc. are invalid,
unenforceable, and not infringed by any Hyundai products,'' in the suit filed
yesterday at the U.S District Court in San Jose, California.
Hyundai's action comes a day after Micron Technology Inc., the No. 3
memory-chip maker, sued Rambus for violation of antitrust laws. The
chipmakers aim to challenge Rambus's attempt to enforce patents providing
wide-ranging royalties from the memory chip industry, estimated to be worth
$30 billion in revenues this year.
Hyundai said it filed the lawsuit ``in response to an assertion of infringement
by Rambus and a demand that Hyundai accept and pay royalties under the
Rambus patents.''
Rambus declined to say how much it expects to collect in royalties.
``Rambus's patents are a negative for the industry in that they will increase the
overall amount of money paid out in patents,'' said B. J. Koo, a semiconductor
analyst at Jardine Fleming in Seoul.
Koo forecast a successful defense of the patents by Rambus will increase the
amount paid to design patent holders from 1.5 percent of sales to over 2
percent.
Resistance
Some memory makers, particularly Hyundai and Micron, have chosen not to
make or scale back production of Rambus chips because the manufacturing
cost is higher than that for alternatives. Rambus-standard chips account for
about 5 percent of the memory chip market today.
Oki Electric Industry Co. last month agreed to pay Rambus royalties for
patents Rambus claims cover two alternative memory- chip standards,
including synchronous dynamic random-access memory, or SDRAM.
Micron and Hyundai insist that SDRAM, which is currently the mainstream
memory chip used in personal computers, is an open standard.
Toshiba Corp. and Hitachi Ltd. reached agreements with Rambus earlier this
year similar to that with Oki. Hitachi acted after Rambus sued Toshiba,
Japan's biggest electronics maker, in January, accusing it of patent
infringement.
Dynamic random access memory, or DRAM, chips act as the main memory
for personal computers. Processor makers such as Intel Corp. and Advanced
Micro Devices Inc. compete in the high end of their business by offering chips
that run at high speeds. Memory makers in response need to increase the
speed at which their products can receive and transmit information.
Rambus's designs are one attempt to solve that problem.
More Negotiations
In Japan, NEC Corp., the world's fourth largest memory chipmaker, has been
``in talks for the past few weeks'' on whether NEC is infringing Rambus
patents, said NEC spokesman Aston Bridgman. ``The whole industry needs a
definition'' of Rambus patents, he said.
Samsung Electronics Co., the world's largest memory-chip maker, has been
the main advocate of Rambus technology. Samsung says the designer's
technology will account for 40 percent of its production by the end of next
year.
``The Hyundai law suit is irrelevant to Samsung because of our special
relationship with Rambus, and we haven't received any requests for new
royalty payments from them,'' said James Chung, a Samsung spokesman.
``We are not worried about the situation, and we're sure that any problems will
be solved in a peaceful way.''
And some agree.
``The patent fee that will be paid by Hyundai and that paid by Samsung are
going to be different as Samsung has been a major helper of Rambus,'' said
Jardine Fleming's Koo, who added that he thinks companies who oppose
Rambus's patent claims will probably end up paying higher royalties.
Hyundai shares fell 2.9 percent to 22,150 won. Rambus stock fell 3.38 to
$80.63 yesterday. It has risen more than fourfold this year. |
