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

To: mishedlo who wrote (58494)	10/22/2000 9:26:51 PM
From: Zeev Hed	Read Replies (2) \| Respond to of 93625

misheldo, give me the patents numbers cited by Rambus as "infringed upon" and I'll try and see if I can answer your question. I have just done a search and the Bu$$ already is up to 102 US patents (the last October 3, 2000), I perused through some of the titles and even opened few and looked at some claims. Some of these are quite general ("apparatus" patents, and thus could extent to much more than memory), other are more limited in scope (memory) and yet many others are just methods patent. I can't go over all of them, but can look at three or four they consider critical. Zeev

To: mishedlo who wrote (58494)	10/22/2000 10:15:00 PM
From: jim kelley	Read Replies (2) \| Respond to of 93625

Mishedlo, Heads up! BILOW is putting out Cr@p again! BILOW's estimate of the PC controller market is way too high. The 2.5 to 5% rate, say 4% on controllers should not apply to the CPU but to the chip containing the interface. I believe that is the Northbridge. So the royalties in most cases apply to the chip sets and not the CPU per se. After all even the P4 uses the FSB to interface to its chipset. The FSB is not a RDRAM controller interface. The chip sets appear to be in the 30 to 60 dollar range while the processor may be as much as several thousand dollars. The Northbridge is about half the chip set so I get about 84 million dollars. Allowing for error it could be 80 to 160M per year in royalties. This is far from the 1 B in royalties that BILOW is spouting about. Another, part of the controller market is the embedded processor market. This market may be larger than the PC market in unit sales. Some of these embedded processors have SDRAM and some RDRAM controllers. I do not have a good estimate of the size of this market but it is big. By the way, Rambus is already collecting on some embedded processors from Toshiba, NEC, Hitachi, OKI and Intel. So yes, there is a firmly established basis for collecting royalties on controllers. :)

To: mishedlo who wrote (58494)	10/23/2000 12:18:39 AM
From: Bilow	Read Replies (2) \| Respond to of 93625

Hi mishedlo; Re "Why are chipsets covered by their IP, why are memory controllers as opposed to memory covered by their IP?" Rambus' most serious DDR/SDRAM patent is for the register bit(s) that distinguishes CAS delay in SDRAM and DDR. [I.e. CL2 vs CL3 SDRAM.] But the patent (if it is valid for SDRAM) not only covers that register bit, it also covers the technique of how you change the state of that bit. Every time an SDRAM is powered up that register has to be set, and the thing that sets it is the memory controller. Thus Rambus' patents cover the memory controller. If the memory controller is in a chipset, costing $20, then Rambus presumably takes 4% of that $20. If the memory controller is in a high end integrated CPU that costs $500, (as I expect the industry to converge on within 3 years or so), then Rambus presumably takes 4% of the $500. I think this is ridiculous, and I fully expect to see Rambus spanked hard for having the chutzpah to tell investors this kind of stuff. The Infineon counter lawsuit shows what industry is setting up - a massive industry-wide lawsuit that threatens to halt production of all but embedded DRAM. The issue could be resolved with a commission to assign royalties on the basis of the percentage of the IP owned, and on that basis Rambus' royalties will be reduced to a fraction of a percent. My figures are higher than Zeev's because I include the chipset (and integrated CPU) prices in the figures, and because I know that DDR, which Rambus charges higher royalties on, is the next mainstream memory. That said, I believe that the Rambus royalty story will fall apart as they lose court cases. I posted links to papers explaining the EEC and US positions on "essential" patents, and it is obvious why the memory industry is concentrating on the JEDEC connection - that is the most obvious open and shut case against Rambus. I will be really surprised to see Rambus win these lawsuits. But I have been wrong before. There is no way that Rambus' DDR patents, which are tiny, are worth 3% royalties if their RDRAM patents, which are comprehensive, are only worth 2%. What they are asking is unfair, immoral, and likely illegal. Their threat to shut down memory makers who lose court cases is plainly impossible to carry out, as Zeev has attested. But the courts won't decide on any of this for quite some time, and in the meantime, the insiders will continue to pump the stock with exaggerated press releases (like the OKI agreement) and dump their holdings. Eventually, someone is going to be left holding the bag, and my prediction is that this will be mom and pop, cause mom and pop are the ones who use their "hope" instead of their brain when holding losers. After it becomes obvious that DDR is the winner, I will quit posting my DDoDDRN type posts, and convert over covering the lawsuit news and insider trading reports. -- Carl