Mitsubishi May Follow Oki Into Rambus Fold
(07/28/00, 5:25 p.m. ET) By Mark Hachman, TechWeb News
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Rambus is filling up its SDRAM stable by corralling second-tier vendors.
The controversial memory maker on Friday announced a licensing agreement with Oki Electric, and Mitsubishi confirmed that it, too, is talking with Rambus (stock: RMBS) about a similar deal.
In the past six weeks, Rambus has made separate, parallel arrangements with Toshiba and Hitachi (stock: HIT).
"They're going after the smaller players, definitely," said Sherry Garber, an analyst with Semico Research, Phoenix. "It's possible they want to gain momentum ... but they're also targeting one or two big players, too."
According to Semico Research, Toshiba and Hitachi ranked sixth and ninth in 1999 DRAM sales, at $1.49 billion and $500 million, respectively. Oki was 10th, with about $450 million in DRAM revenue.
If Rambus continues its pattern of licensing SDRAM to second-tier vendors, Mitsubishi and Fujitsu Microelectronics deals may soon follow Oki's. Mitsubishi and Fujitsu ranked seventh and eighth in overall 1999 DRAM sales, Semico said, with about $880 and $550 million in revenue, respectively. Infineon (stock: IFX) ranked fifth in 1999 DRAM sales, at $1.63 billion.
Cecil Conkle, assistant vice president of DRAM marketing at Mitsubishi Electronics America, Sunnyvale, Calif., said Rambus has approached his firm about negotiating a license.
"They have been to talk to us, and we are in negotiations, and that's all I can say at this time," Conkle said.
A spokeswoman for Fujitsu Microelectronics -- Fujitsu's U.S. semiconductor subsidiary in San Jose, Calif. -- said she was unaware of any similar talks with Rambus.
Semico, however, believes Fujitsu and Mitsubishi may withdraw from the PC DRAM market.
Avo Kanadjian, vice president of marketing for Rambus, said the company did not necessarily seek out Hitachi and Toshiba because of their place in the overall DRAM market. The Hitachi deal was signed to settle a much-publicized legal dispute between the two firms, and Toshiba and Oki were two of several firms that proactively approached Rambus about negotiating a license, Kanadjian said.
Toshiba has licensed Rambus technologies for a decade, so a strong relationship was already in place, he said.
Oki's licensing agreement closely resembles the Toshiba and Hitachi deals. Oki will pay Rambus a fee for the technology used in crafting SDRAM, double-data-rate SDRAM, and DRAM controllers. As it has done previously, Rambus will charge Oki higher royalty rates for its use of DDR memory, making production of Direct Rambus DRAM less expensive to manufacture, at least on a royalty basis.
According to Kanadjian, the Oki deal is retroactive to April 1, as with the Toshiba and Hitachi agreements.
Under the standard terms of its licensing agreements, Rambus requires licensees to tally up the amount of DRAM (and, in this case, logic controllers) that use the licensed technology and report the figure at the end of the quarter. Rambus then receives the royalty payments during the subsequent quarter.
This means Hitachi, Toshiba, and Oki will make royalty payments to Rambus this quarter.
Kanadjian said other firms continue to explore licenses with Rambus, including logic and DRAM firms, but he would not comment upon the number of firms or whether Rambus would announce similar deals in the near future.
"Our preference has always been to settle amicably," Kanadjian said. |
