March 21, 2005 9:31 AM PST

Rambus and Infineon reach settlement

Chipmaker Infineon Technologies and memory chip designer Rambus have reached a settlement in their closely watched patent infringement case.

Under the two-year agreement, announced Monday, Infineon will pay Rambus nearly $47 million for a global license to all existing and future Rambus patents and patent applications for use in Infineon products.

The licensing fees, which will be paid on a quarterly basis beginning Nov. 15, will conclude in 2007. After that period, Infineon may make additional quarterly payments that can accumulate up to $100 million, provided other DRAM manufacturers enter into licensing arrangements with Rambus.

"We are satisfied with these terms (of the settlement), and we believe they're in the best interest of our shareholders," Harold Hughes, Rambus' CEO, said during a conference call with analysts. However, "the terms of this agreement should not be extrapolated to future agreements with other companies and are unique to these circumstances."

Still, the company believes that the settlement will help it in its other patent cases and will speed the introduction of its technologies in the chip market, Hughes said.

The Infineon lawsuit was one of several that Rambus filed against chipmakers, beginning in 2000, over its memory patents.

Rambus sued Infineon, along with Micron Technology, Hyundai Electronics Industries (now Hynix Semiconductor) and others, over allegations they infringed on Rambus patents by manufacturing SDRAM, the most common memory chip used today in computers, and its successor, DDR DRAM. Rambus alleged the chipmakers had infringed on its RDRAM high-speed memory technology in manufacturing these other chips. The suits against Micron and Hynix are still pending.

A number of industry observers have characterized the lawsuits as having put the memory industry in a precarious state.

The agreement with Infineon comes three weeks after a judge dismissed Rambus' claims against the chipmaker.

Separately, Rambus issued lower earnings guidance on Monday.

The company now expects its first-quarter revenue to be slightly lower, between $37 million and $38 million, versus its January forecast of $38 million to $42 million.

The company also expects its spending for the quarter to be higher. Spending will range from $33 million to $36 million, versus Rambus' previous projection of spending between $30 million and $34 million. The change is due to higher-than-expected litigation costs, said Robert Eulau, Rambus' CFO.

Despite the change in guidance, Rambus' stock price was up nearly 30 percent early Monday.

CNET News.com's John G. Spooner contributed to this report.

 

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