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Technology Stocks : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: Bala Vasireddi who wrote (8018)	6/26/2000 6:18:00 PM
From: Allen Benn	Read Replies (1) \| Respond to of 10309

I know WIND has announced support (and a negotiated royalty fee) for the i960 and StrongARM processor in the past. With the way the processor nomenclature has changed (is changing) do you have any idea (or comments) on wether this would mean changes in the pricing stucture? Also WIND has to probably come up with a "generic" contract to support/port IxWorks for any type of processor core Intel slots as 80xxx series. You might recall WIND negotiated I2O chip contracts with DEC before Intel acquired DEC's semiconductor business. This means Intel inherited the existing WIND/DEC contract, and would have to honor it unless it is renegotiated. You might also recall that last year's I2O royalties consisted of i960Rx shipments and fixed quarterly minimums from the old DEC and Symbios Logic contracts. The per unit royalties under the DEC contract was stated (by Ron Abelmann) to be larger than the i960Rx royalties because the shipment volumes were expected to be less. Meanwhile, periodically Intel has introduced faster, higher-end i960Rx's. I would expect that Intel and WIND have renegotiated the original Intel and DEC contracts, resulting a simple royalty formula applicable to the unit volume of IOP's shipped, irrespective of the core or other refinements. Further, I would expect the unit royalty to be unchanged from before, but I could be wrong. Intel now has much more riding on the success of IOP's than does WIND. If anything, Intel might voluntarily increase the royalty to make certain that WIND remains excited and interested in I2O. On the other hand, WIND would not want to jeopardize other deals (like IXA, CofE, InfiniBand I2O, iRAID, iLAN) with Intel to win a few extra royalty bucks, particularly since the big I2O payoff comes downstream from verticals, not IOP royalties. Thus, it seems to me that maintaining the status quo, without gouging on StrongARM cores, is the obvious outcome. You are correct that Intel will insist that WIND support new releases of IOPs. As stated at the Analyst Day, WIND normally credits semiconductor companies up to the amount they prepay for porting, based on a formula that reflects royalties WIND receives because of the port. Following this lead, and noting that IOP's have not been included in the CofE between WIND and Intel, it follows that the I2O team probably effectively derives its support from IOP royalties and product license sales, as they are already significant. If so, then this lends support for keeping royalties at least at the current level. Allen