Deep Breathing Exercise (RMBS):
streetfusion.com
If that link doesn't work, then try this one:
streetfusion.com
Geoff Tate Speech - Mid-Qtr Conference Call - May 11, 2001:
“I'm going to focus my comments this afternoon on two topics -- first, the status of litigation in which we are involved and second, an update on Rambus' core business. On the first topic, I know that those of you who are shareholders or followers of Rambus are as disappointed as I am over the result of our patent infringement suit in Richmond, Virginia, against Infineon Technologies AG of Germany. As said in our press releases on this subject, we believe the various rulings against us in this trial are wrong, and we are totally committed to our appeal to overturn them. We would expect the decision on the appeal some time next year. In addition, we have another trial date in one week against Infineon in Germany where we have sued them for violation of one of our European patents. While Germany for Infineon is an important market and we believe their largest DRAM manufacturing location, so this is an important suit for Infineon, and we expect a decision from the Judge in the German case some time in June. We also have a near term litigation with Micron in Italy where a decision from the Judge should come this month, and in Delaware where the first part of that case is currently scheduled to start May 31. With the high degree of publicity coming from the Richmond case, certain basic truths have become obscured, and I would like to emphasize those here and now.
First, Rambus' founders Mike Farmwald and Mark Horowitz developed a revolutionary and comprehensive group of concepts for high speed chip connection technology in 1990 which they incorporated into a very detailed technical description as part of the patent application. Nothing coming from the Richmond trial casts any doubt whatever on the fact that Rambus invented this revolutionary technology.
Second, many patents have been issued based on the initial disclosure by our founders. To date, in addition to further inventions, Rambus has been issued over 100 patents worldwide, and we have many, many more in process. The decision in Richmond affects only four (4) of these patents and did not invalidate them, but rather concluded that we had not proven infringement by Infineon for those four (4) patents. More patents in the U.S. and Europe exist which are relevant to SDRAM and DDR SDRAM than these four (4).
Third item, under non-disclosure and/or license agreements, Rambus taught the industry since 1990 how to make and use its innovations involving semiconductors and computer communications and consumer systems. Our objective in teaching the industry was to have them license and manufacture and sell Rambus DRAM based systems. Rambus taught the DRAM industry a wide range of inventions, including burst transfer, timing compensation using delayed lock loops, low swing signaling, transfer on both edges of the clock, source synchronous clocking, and much, much more.
Fourth, Rambus attended meetings at an industry standard setting group known as JEDEC as an observer for over four years. Starting in 1991, JEDEC proposals were made for synchronous DRAMs which incorporated ideas which had first been pioneered by Rambus. When we saw our inventions appearing in SDRAM proposals, we sought to protect our rights by amending patent applications. Under U.S. patent law, as long as an invention is disclosed in the original technical description it is possible and completely legal to later add or amend claims to protect the invention, even if not claimed originally in the first filing. In fact, this is quite common. However, none of these additional amended claims were asserted in the Infineon case. It was not until 1998 long after our participation in JEDEC had ended and the SDRAM specification was long public that we filed additional claims to clarify what we invented in 1990 which resulted in patents whose claims are infringed by SDRAM and DDR SDRAM. In 1999 the first of these new patents were issued at which point Rambus began to negotiate with the industry based on the applicability of the claims in these patents to SDRAM and DDR SDRAM. We currently have eight licensees for these patents, including DRAM manufacturers who account for almost half of the world's DRAM supply.
Fifth, Rambus followed the rules of JEDEC as best it could, despite the fact that these rules were unclear, contradictory, not clearly indicated, not clearly communicated consistently, and were not complied with by most members of JEDEC. The effect of the Richmond ruling is that any innovative company merely attending a standards committee is potentially forfeiting its intellectual property rights, even if it tries to follow the rules. This is a chilling ruling for all inventors and it says that they should immediately leave standards bodies. It's also a chilling ruling for all standards bodies who have failed to meet their objectives without??? (Note: I couldn't quite hear the word he used here - but I believe it was "without") participation of the inventors to provide the grist for the mill. The revolutionary aspect of our company and its sucess has resulted in a great deal of envy among some companies who are locked into older business models in a highly competitive commodity DRAM business. One of the results of the documentation produced in the Richmond case was a clear indication of a group effort by a few of these companies to defeat Rambus and a fear of Rambus, so they would not have to change the way they do business. They will not be successful in this effort.
I now want to turn to the section of our core business which is our future in the long term as Bob has said. One unfortunate aspect of the high degree of publicity coming from the Richmond infringement case is that it has obscured the real progress we are making in our base high-bandwidth chip connection business. RDRAMs are ramping, thanks to decreased prices and increase in demand for desktop PCs and workstations based on the Intel Pentium 4 processor and 850 chipset, from the Sony PlayStation 2 and the Japanese digital TV market where multiple manufacturers are shipping systems in volume using Rambus DRAMs. In the past six weeks, we have seen the cost of a 128MB RIMM to a PC OEM drop by more than 30%. More than 30% in just the past six weeks to now well under $100. As a result, we have recently seen the first RDRAM equipped PCs priced to consumers for less than $900, without a monitor, appear on the market. Most market analyst projections now show between 250M to 300 million 128 Mbit equivalent RDRAMs shipping in 2001. In anticipation of even greater demand in 2002, five (5) major dram have already qualified production ready 256 Mbit RDRAMs to drive Rambus DRAM volume even higher next year. Rambus continues to innovate in its core technology areas. Over the next several months we will have Rambus Developers Forums held June 13 and 14 in Tokyo and September 18 and 19 in San Jose. At these Developers Forums we will be making a series of announcements about technology advancements which we have been developing over the past year or more, and we will provide a roadmap for future use of Rambus memory technology in PCs, Rambus memory technology in consumer and communications applications and Rambus high-band(width) networking chip connection technology. Also, we are pleased that we have signed our first licensee for the Rambus ser des cell -- our first non-memory interface chip connection technology -- and we have already transferred a production ready ser des cell for incorporation into that customer's networking IC. Their IC is scheduled to go in production in the next year. We are finding a wide interest for our ser des technology in the networking area and expect to sign additional licensees in the near future.
In closing, I would like to emphasize the fundamental strengths of Rambus. Against great odds we pioneered revolutionary high-speed chip connection technology which is now achieving success in important applications as diverse as PCs, video game consoles, digital TVs and networking equipment. We also pioneered a new business model which has resulted in a highly profitable company. Rambus has been profitable for the four years that we have been a public company at levels unusual in the semiconductor industry. In addition, we consistently generate cash. Our current cash balances total about $150 million dollars. The real strength of Rambus is our technical innovation and our ability to create markets for the designs resulting from this innovation. The primary focus of the 180 employees of Rambus is this continuing innovation and market development. However, we owe it to our shareholders to make sure that anyone using Rambus innovations pays a fair royalty to us for that use. We will continue to pursue those few who are not willing to pay for the use of intellectual property which we developed, because that it is the basic underpinning of our business. While the necessary occasional litigation which results from this effort may be newsworthy, I would encourage investors to keep your focus on the progress of our core business. That's the end of our prepared remarks today.” |
