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Rambus signs $75 mln licensing deal with AMD
BOSTON (Reuters) - Rambus Inc. (Nasdaq:RMBS - news) on Tuesday said that chipmaker Advanced Micro Devices Inc. (NYSE:AMD - news) has agreed to pay $75 million over five years to license Rambus technology for boosting the speed at which computer chips communicate with each other.
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Shares in Rambus rose $1.66, or 10 percent, to $17.85 in early morning Nasdaq trade.
The AMD deal will bring in approximately $15 million in revenue during each year of its five-year term, said Rambus spokeswoman Linda Ashmore.
The company was expected to report $166 million in revenue during 2006, according to analysts polled by Reuters. The AMD deal was not factored into those forecasts, said A.G. Edwards analyst Gary Mobley.
"It's incremental," he said. "It will add almost 10 percent toward revenue."
Rambus is a Los Altos, California, research company that develops technologies to make computers more powerful. It patents them, then sells the rights to companies such as AMD and Intel Corp. that integrate the technologies into their products.
The agreement with AMD doesn't cover Rambus patents related to a widely used type of computer memory.
For years, Rambus has been seeking royalties from some of the world's largest memory-chip makers on intellectual property that it asserts is used in so-called DRAM memory chips.
The litigation has led to huge legal fees that have cut into its earnings.
The licensing deal with AMD is a sign that Rambus is moving on, generating significant revenue from patents not related to those lawsuits, Mobley said.
"It is validation that Rambus is a lot more than just a plaintiff in six memory cases," Mobley said. "They do have a business foundation."
BOSTON (Reuters) - Rambus Inc. (Nasdaq:RMBS - news) on Tuesday said that chipmaker Advanced Micro Devices Inc. (NYSE:AMD - news) has agreed to pay $75 million over five years to license Rambus technology for boosting the speed at which computer chips communicate with each other.
ADVERTISEMENT
Shares in Rambus rose $1.66, or 10 percent, to $17.85 in early morning Nasdaq trade.
The AMD deal will bring in approximately $15 million in revenue during each year of its five-year term, said Rambus spokeswoman Linda Ashmore.
The company was expected to report $166 million in revenue during 2006, according to analysts polled by Reuters. The AMD deal was not factored into those forecasts, said A.G. Edwards analyst Gary Mobley.
"It's incremental," he said. "It will add almost 10 percent toward revenue."
Rambus is a Los Altos, California, research company that develops technologies to make computers more powerful. It patents them, then sells the rights to companies such as AMD and Intel Corp. that integrate the technologies into their products.
The agreement with AMD doesn't cover Rambus patents related to a widely used type of computer memory.
For years, Rambus has been seeking royalties from some of the world's largest memory-chip makers on intellectual property that it asserts is used in so-called DRAM memory chips.
The litigation has led to huge legal fees that have cut into its earnings.
The licensing deal with AMD is a sign that Rambus is moving on, generating significant revenue from patents not related to those lawsuits, Mobley said.
"It is validation that Rambus is a lot more than just a plaintiff in six memory cases," Mobley said. "They do have a business foundation."
