NEWS ! " Rambus Reveals Plans " NEWS !
From YAHOO... by: infonewsman
11/17/00 1:51 pm
Msg: 191671 of 191680
Rambus Reveals Plans To Collect Royalties From Chipset Makers
By Steven Fyffe, Electronic News
Nov 17, 2000 --- Chipset makers will be the next ones up against the wall once Rambus
Inc. has dispensed with the last remaining memory makers resisting its campaign to collect
royalties on SDRAM and double data rate (DDR) memory chips.
Rambus wants all chipset makers, including Intel Corp., to start paying royalties on any
device that interfaces with an SDRAM, DDR or direct Rambus DRAM (RDRAM) chip, a
Rambus executive revealed in a candid interview with Electronic News at the Comdex
trade show in Las Vegas this week.
“We still have to license other controller manufacturers,” said Avo Kanadjian, vice
president of worldwide marketing at Rambus. “We are hoping that over time our category
of licensees will grow bigger. All controller manufacturers also need to be licensed.”
Rambus is currently embroiled in a messy three-way legal battle with Micron Technology
Inc., Hyundai Electronics Industries Co. Ltd. and Infineon Technologies AG, who all say
they shouldn’t have to pay royalties on SDRAM and DDR. They accuse Rambus of
subverting the Joint Electron Device Engineering Council (JEDEC) process when the
company kept its patents on SDRAM secret while attending JEDEC meetings intended to
establish an open industry standard.
Samsung Semiconductor Inc. and Elpida Memory Inc. recently relented and inked licensing
deals with Rambus covering SDRAM, DDR and associated memory controllers or
chipsets.
“I would say that the negotiations with Samsung were difficult, but at the end of the day we
came to an agreement, which will end up being a win-win agreement,” Kanadjian said.
The latest move to demand royalties from chipset makers was foreshadowed earlier in the
year when Rambus sued Hitachi Ltd. over the SDRAM memory controller it had sold to
Sega Enterprises Ltd. for its Dreamcast game console. Hitachi signed a licensing deal with
Rambus soon after its customer Sega was dragged into the legal proceedings.
“The logic is there,” said Steve Cullen, principal analyst at Cahners In-Stat Group. “They
established that point when they got the license from Hitachi.”
Chipset licensing could be a lucrative sideline for Mountain View, Calif.-based Rambus,
Cullen said.
“Rambus has said all along that the royalties on memory controllers are higher than the
royalties on DRAM. The controller chips are potentially the bigger cash drain in the long
run.”
That is probably why Infineon, which produces a lot of memory controllers, is kicking back
so hard at Rambus’ royalty claims in court, Cullen said.
Rambus’ runaway patent claims could extend even further than just chipsets, to ASICS,
programmable logic and graphics chips, according to Jim Handy, chief analyst at the
GartnerGroup Inc.’s Dataquest unit.
“If Rambus’ patents hold, then they are going to have a reason to collect royalties not only
from anybody who manufactures SDRAM, DDR or RDRAM, but also anybody who
makes a controller or ASIC that talks to one of those chips,” Handy said. “That’s a pretty
big part of the semiconductor market. There are an awful lot of people that need to look at
what Rambus has got and what they want to do about it.
“They are making the same statement that anybody else who has a strong patent portfolio
states,” Handy said. “Rambus has warned everybody that everybody is within their reach.”
Part of the rationale behind financial firm Morgan Stanley Dean Witter’s high valuation of
Rambus is the company’s potential for big future royalty revenues.
But the wider Rambus casts its royalty net, the greater the possibility that it will hit a snag,
said Bert McComas, principal analyst at InQuest Market Research.
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