Rambus CFO Expects Revenue to Grow Sharply: Bloomberg Forum
Rambus CFO Expects Revenue to Grow Sharply: Bloomberg Forum
Mountain View, California, July 15 (Bloomberg) -- Rambus Inc. expects its revenue to grow sharply over the next few quarters because of increasing acceptance of its advanced-memory technology for new chips, Chief Financial Officer Gary Harmon said. ''There were no surprises,'' said Harmon. The Rambus executive said revenue declined 5 percent from the prior quarter because the number of Nintendo64 game players from Nintendo Corp. decreased, following the holiday boom. ''That was a seasonal drop off,'' he said.
Harmon told the Bloomberg Forum that wasn't a deterrent because the DRAM designer has now awarded licenses to 28 of the world's biggest semiconductor companies, including Intel Corp., and expects its royalty income to increase sharply. ''Three quarters of our revenue now comes from contracts'' to vendors like Nintendo, the Rambus CFO explained. Now, as Intel, Toshiba Corp., Siemens AG and Micron Technology Inc. all plan to start shipping next-generation memories with the Rambus DRAM technology, revenue will grow sharply.
Harmon, 60, declined to predict earnings growth.
Rambus has already booked revenue exceeding $1 billion, the CFO said. That will surge as more servers and personal computers from customers including Compaq Computer Corp. and Dell Computer Corp. ship as early as next year.
Revenue ''is going to increase as Rambus increasingly gets into the PC main-memory business,'' Harmon explained. To date, virtually all of the chip-developer's revenue has come from consumer-electronics products like Nintendo games, karaoke players and audio equipment.
Intel, which is working on a chip set that combines the Rambus DRAM technology with its Pentium chip, expects to complete development later this year, Harmon said. That's one reason why Compaq and other PC vendors have announced they support the technology.
Intel Option
Intel has an option to acquire as many as a million shares of Rambus at 10 apiece after two consecutive quarters in which its sells 20 percent of all its chip sets incorporated with Rambus technology. ''We don't expect that to happen before the end of next year or even into 2000,'' the Rambus CFO said.
Meanwhile, all of the company's licensees have reported that they are able to successfully build the chips from Rambus designs. The company doesn't make any of its own chips.
Harmon acknowledged that other semiconductor companies are also trying to speed more data throughout PCs and electronic products. NeoMagic Corp., which already sells faster memory products to both Compaq and Dell for laptops, ''specializes in mobile applications,'' he said.
MIPS Technologies Inc., which was partially spun out from Silicon Graphics Inc. last month, ''is more in the processor business,'' Harmon said. Last week, MIPS President John Bourgoin told the Bloomberg Forum that his company would use three separate chips to expand sales to Nintendo as well as to makers of set-top boxes for television and other electronic products.
Still, the Rambus CFO said his company's engineers weren't the only ones seeking to solve a common problem. ''There are other types of technologies,'' he said.
Meanwhile, Harmon said the company expects to devote most of its $83.5 million in cash and marketable securities to more research and development, especially software. Those assets rose 18 percent over the year-ago quarter.
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