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Technology Stocks : Rambus (RMBS) - Eagle or Penguin
RMBS 102.42+3.6%12:10 PM EST
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To: Zeev Hed who wrote (59737)11/1/2000 11:33:57 PM
From: Dan3  Read Replies (3) of 93625
 
Re: the license on a DRAM that RMBS might charge is still a minute fraction of the license fee software companies charge

Do you honestly believe that's a relevant comparison? Software is basically pure IP (many programs can be purchased electronically and downloaded - no physical product is delivered), and generally the total IP is from the company requesting the fee. Marginal costs are nearly zero and marginal gross profit nearly 100%.

In the case of a memory chip, a Billion dollar FAB must be built and paid for, materials purchased and processed, and the product delivered. The IP used is from hundreds of companies, marginal costs are substantial, especially if capital plant costs are taken into account, and marginal profit is often less than 10%.

Now one company, with a handful of the thousands of patents used in the manufacture of the memory wants a third of that 10% profit.

This is not like licensing software.

Dan
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