RMBS CEO interview
On recent applications with Rambus inside.
Right now we have the Sony PlayStation2 in Japan and digital TVs, which have become very popular and are expected to be a multi-million unit market this year. Almost all of the digital TVs in Japan use Rambus technology as do digital set top boxes and digital VCRs which go with that digital TV infrastructure in Japan. We are being designed into gigabit switches and high-speed routers, as well as laser printers and inkjet printers. EMC (NYSE:EMC) recently announced new storage networking devices using Rambus. There are testers that are being designed that are using Rambus DRAM. So we see Rambus going into every type of application that uses DRAM devices and not just PCs.
On the litigation.
One thing to make sure to note, as we discussed in the previous question, is that each of these companies is a licensee of Rambus DRAM. None of them is really in volume production, but they are licensees and we continue to have engineering meetings with them and support them in the development of Rambus DRAM. The disputes are focused on other products, synchronous DRAM (SDRAM), DDR SDRAM and the logic chips which connect to those kinds of memories. Our allegation and belief is that we have fundamental patents dating back to 1990 which cover key elements used in these other memory types, and these companies either owe us financial compensation for use of our intellectual property or should stop using our intellectual property. The majority of DRAM companies agree with our position and have signed agreements with Rambus to license our patents for use in these non-Rambus products. Infineon, Hyundai and Micron have chosen to litigate rather than negotiate.
In terms of financial outcome and our future success, the current litigation certainly is significant. However, from a long term perspective I don't think that it is the most important thing for us. We believe that the market is moving to higher performance memory types, that Rambus DRAM is the highest performance memory type and that Rambus DRAM will grow in market share over time as it certainly is doing this year. The other memory types that are involved in the current litigation will be losing market share over time. We think that we are strategically well positioned regardless of the outcome of the litigation, and as well we are working on new technologies and new markets that we think over time will have big leverage and high impact for us
QRSL is a multilevel signaling chip connection technology, and again it marks us as leaders in the world of high performance multiple chip, or bus signaling capability. At an industry forum last week we announced and demonstrated transfer rates of 2 gigabits per second, which is far in excess of anything available from any competitive technology. We are working with partners now to productize this technology.
On QRSL.
If you look at previous generations of Rambus technology, from the time we start working with the chip and systems company to the time the technology is in production averages about two years. Even when our technology is ready for the market, our partners have to design the chips and the systems which use the chips and sometimes they even have to write the software. QRSL is certainly not going to be available in the market this year and probably not next year; it is most likely a 2002 production technology.
We are hopeful that the first licensee will be announced this quarter. Of course there is never a guarantee, but we are working at the engineering level with more than one company at this point while the licensing negotiations are hopefully culminating. SerDes, which stands for serializer/deserializer, is basically a high speed, point to point signaling technology for lower cost, simpler but faster backplane connections in networking applications such as switches and routers.
On Serdes.
In the past our focus has been on memory interface moving data between DRAM and graphics or microprocessor chips. As we have worked with customers in the networking area, people have told us that our high-speed technology would be helpful to solve other kinds of performance bottlenecks, and the one that we chose to focus on first was the networking backplane performance bottleneck. We are new in this marketplace and, like everything that we do, there is some lead time for the engineering work to take place and then for our partners to get into production. But we believe that the networking market is one with high growth and is very synergistic with what we are doing in the memory interface area, in some cases involving customers that we are already working with on Rambus DRAM. We believe that over time we will be able to establish ourselves in this market segment with the highest performance technology for network backplane solutions.
Is Rambus as a chip company or an intellectual property company?
Geoff: To answer the second question first, we are really not either a chip company or an intellectual property company in the purest sense of those terms. While Rambus is probably closer to what people would call an intellectual property company, the problem with that term is that it makes people think that all we do is file patents and we certainly do much more than that. The way I think of it is we are like a chip company which does everything other than build and sell the chips. We have circuit designers, we have system architects, we have people who understand how to build systems, and what we do is think through the problems customers are having, come up with solutions for those problems and then work with the chip and systems companies to integrate our solutions into their products. When we are working with a company like Sony we have regular weekly engineering calls, we fly over to Japan every month, we design PC boards and connectors for them. We also work with Sony's chip supplier, Toshiba, to design the Rambus portion of their chips and to give them detailed chip layouts based on their process technology. We do a lot more than just come up with the idea and patent it. We are very involved with both our licensees and their systems customers.
We will be looking in the future at all kinds of high-speed data movement between any kind of chips, not just memory chips.
AND BEST OF ALL !!!!!!!!!!
Lastly, if you could leave our readers with one thought about Rambus, what would it be?
Geoff: A lot of people think that Rambus is a new company which is an overnight success. In fact, we have been in business now for nearly eleven years. It takes a long time to develop leading edge, superior technology backed by strong intellectual property, but we believe now that we have now established Rambus DRAM as a standard which gives us increasing momentum in the marketplace. We are pioneers in technology but also pioneers in a new business model which we think ultimately will be demonstrated to be a superior model with high financial leverage and high levels of profitability. In each of the last two quarters our operating margin was over 50% and in calendar year 2000 we had revenues of nearly $100 million which we accomplished with just 175 employees as of the end of the year. I think that we are already demonstrating with this model, even though it was controversial in the early 1990's, that when it works it works incredibly well and is clearly working now.
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Not sure where it originated.
Jack |
