Samsung, Rambus deal could rev new memory technologies

IDG News Service - Rambus' agreement to settle legal claims with Samsung Electronics could accelerate deals that could help new memory technology being developed by Rambus get to market faster, analysts said.

Samsung and Rambus announced a deal Tuesday that ended years of litigation between the companies. As part of the agreement, Samsung will pay Rambus around US$700 million over five years and make an equity investment of $200 million in the company.

Rambus develops technologies that enable high-speed memory architectures that it licenses to memory makers. The technologies are mainly used in high-performance devices. Rambus' XDR memory architecture, for example, is used in Sony's PlayStation game console. The license agreement gives Samsung access to Rambus' intellectual property for five years.

Samsung and Rambus also signed a memorandum of understanding to jointly develop memory technologies, which will initially focus on graphics and mobile memory. The companies will also revive "a potential collaboration" on server and high-speed NAND Flash memories, the companies said.

The Samsung deal sets the stage for Rambus to settle with other memory makers in other legal disputes, analysts said. Such settlements could help Rambus gain customers for its mobile and server technologies.

Rambus has had a checkered past with litigation and it needs to settle cases to line up more manufacturers to push its memory technology to market, said Nathan Brookwood, principal analyst at Insight 64. Chip manufacturers push Rambus' memory-related interface technology to devices.

"The important thing if you're an innovator is for someone to use [your technology]. Samsung will have a more formal and productive relationship with Rambus as opposed to just being litigants, which bodes well for both," Brookwood said. Ending legal disputes could help Rambus and memory companies get back to innovating technologies and bringing them to market.

Rambus in the past filed many suits alleging memory makers infringed on its patents. Some companies in turn alleged that Rambus monopolized markets and failed to disclose its patents with the standards-setting organization, the Joint Electron Device Engineering Council (JEDEC). Rambus was invited to JEDEC as an observer, but memory makers alleged the company used information from the meetings to monopolize markets.

Rambus in 2004 also filed a price-fixing case against Samsung Electronics, Hynix Semiconductor, Infineon and Micron Technology, accusing the companies of violating antitrust laws by fixing memory prices to keep Rambus technology away from the market. Rambus settled with Infineon in 2005 and is asking for Samsung's name to be removed from the case as part of Tuesday's settlement agreement.

Samsung is one of the world's largest memory makers, and the huge settlement could pressure Hynix and Micron to settle quickly with Rambus, said Avi Cohen, a financial analyst with Avian Securities.