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

To: sam who wrote (46072)	6/26/2000 12:22:00 PM
From: sam	Read Replies (3) \| Respond to of 93625

Rambus Uses Patent Clout To Cut Better Deals (06/26/00, 11:53 a.m. ET) By Jack Robertson, Electronic Buyers' News Emboldened by a stunning settlement with Hitachi, Rambus is using its newfound clout in the area of patent enforcement to negotiate royalty agreements with the rest of the industry's DRAM makers -- particularly those pushing double data rate (DDR) SDRAM. The legal masterstroke, which could set the stage for Rambus to exact fees from a variety of DRAM and logic IC makers that use a synchronous memory interface, has set the semiconductor industry on its ear. Refining the scope of its patent claim, Rambus said it is choosing for now to focus on SDRAM, DDR SDRAM, and logic controllers. While not a primary target, that would appear to include the new wave of microprocessors coming from the likes of Intel (stock: INTC), Sega, Transmeta, and Via Technologies, each of which uses a direct interface to synchronous memory. Avo Kanadjian, vice president of worldwide marketing at Rambus (stock: RMBS), declined to identify which additional companies have fallen under scrutiny, but said Rambus "is reviewing the SDRAM product lines of manufacturers, and will contact them on a case-by-case basis to discuss our analysis with them." Rambus' aggressive strategy stems from its assertion that any chip manufacturer using technology that either provides or is designed to accept a connection based on synchronous memory technology is crossing into an intellectual property hot zone. "It would add another layer of royalties on commodity chips that already often suffer from razor-thin margins," said Dan Scovel, an analyst at Needham & Co., New York. "If companies pass on the cost of any new royalties on SDRAMs, their customers are going to face higher prices." The ramifications of such a sweeping ownership claim are still difficult for many in the industry to fathom, but some compared it to Texas Instruments' now legendary defense of patents essential to the basic design of DRAM chips. That lucrative tactic has netted TI untold riches on the sale of billions of the memory devices. While new SDRAM fees could swell the company's royalty stream, Rambus, Mountain View, Calif., is looking to do more than skim the cream off the top of the market. With its goal of pushing Direct RDRAM technology into PCs, and more recently into communications and consumer electronics products, Rambus is building a payment structure to tip the scales in favor of its promising but controversial technology. techweb.com