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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Don Green who wrote (36692)	1/20/2000 11:44:00 AM
From: Don Green	Read Replies (1) \| Respond to of 93625

Mountain View, Calif., Chip Maker Suit to Impact Memory Industry Tom Quinlan 01/20/2000 KRTBN Knight-Ridder Tribune Business News: San Jose Mercury News - California Copyright (C) 2000 KRTBN Knight Ridder Tribune Business News; Source: World Reporter (TM) Rambus Inc.'s patent infringement suit against memory manufacturer Hitachi Inc. could be a shot across the bow of the entire industry --if manufacturers want to make high-speed memory they had better deal with Rambus first. The suit, filed Wednesday in Federal District Court in Delaware, accuses Hitachi of violating four of Rambus ' patents in developing and manufacturing some of the most popular high-speed memory on the market today. While Hitachi is the only company named in the suit so far, most large memory manufacturers, including the two largest manufacturers of standard memory chips, Micron Technology Inc. and Samsung Electronics, produce semiconductors based on the same underlying technology. The affected memory includes chips sold under the names PC-100, PC-133, Double Data rate S-RAM, and a version of memory made specifically for graphics chips. "The patents are pretty broad, and usually the courts don't look that kindly on really broad patents," noted Rich Belgard, an industry consultant and a member of the editorial board for Microprocessor Report, an industry newsletter. "But ( Rambus ') patents are pretty impressive. When I looked at them, Rambus filed more than 100 instances of prior art, so the patent office had a pretty good idea of what was out there when they granted the patents." The U.S. Patent Office relies on "prior art" -- or previous patent applications -- to decide whether technology is new and deserving of a patent, or is instead an "obvious" application of an earlier discovery. Rambus executives make no secret of the fact that they believe that all of the memory cited in the lawsuit, no matter which company makes it, violates their patents. "We believe we have very valuable patents that cover fundamental aspects of synchronous DRAM," said Avo Kanadjian, vice president of worldwide marketing for Rambus . "It's always been our position that we've invented fundamental aspects of high speed memory interfaces and that other companies will want to license our technology for use in (developing) non- Rambus memory," he added. "We would prefer to negotiate and settle amicably." But the timing of the suit has raised questions about whether Rambus is losing confidence in its ability to establish its memory design -- known as R-DRAM -- as the leading next generation high-speed memory design. Although Rambus said it filed suit only after lengthy negotiations with Hitachi had failed to produce a settlement, it was filed two days after a group of the leading memory manufacturers -- Hyundai Electronics, Infineon Technologies, Micron Technology Inc., NEC Electronics Inc. and Samsung Electronics -- announced that they would work together to create a new high-speed memory design. Adding punch to the announcement was the fact that Santa Clara-based Intel Corp. -- one of the early backer of the Rambus technology, and the driving force in making it a standard -- was also part of the group. Although Intel has been the most significant backer of the Rambus memory design -- contributing both money and considerable clout in getting companies to adopt it -- lately it has been developing products that work with other high-speed memory designs. Those efforts came after numerous delays in manufacturing enough Rambus memory -- at a cheap enough price -- to meet the needs of personal computer manufacturers. "They could have looked at that as Intel sending them a signal that they were losing interest in the Rambus architecture," Belgard said. "This could have been a message back to Intel." But the scope of the lawsuit has the potential to effect almost every semiconductor manufacturer. In addition to asking the court to stop Hitachi from manufacturing and shipping what it says are infringing memory products, Rambus is also trying to stop Hitachi from selling processors that include built-in interfaces, known as controllers, that let processors communicate with the memory chips. And that puts almost everyone in Rambus ' sights. Intel builds and sells chip sets -- support chips that act as the interface between its processor and the rest of the computer -- that includes those memory controllers. The most powerful chip from start-up Transmeta Corp. of Santa Clara includes a built-in double data rate RAM controller, and most PC manufacturers have introduced systems that use one of the memory designs named in the chip. Intel declined to comment on the suit, as the Santa Clara chip has not been named in it, and the American arm of Hitachi could not be reached for comment.