Rambus Needs Intel on Its Side

Rambus(RMBS Quote) has been wrapped up in court cases for years over its intellectual property, which helps shuttle data back and forth between semiconductors. But with last month's resolution of a key case, Rambus is working hard to move its memory interfaces into the future plans of Intel(INTC Quote), the world's largest chipmaker.

"We want to find ways to get back on the Intel roadmap," says Rambus CEO Harold Hughes, who spent 23 years at Intel in a variety of positions, including chief financial officer.

The two companies already have a relationship -- Intel is Rambus' largest customer -- but if Rambus can get Intel to embrace its latest technology, Rambus will likely see increased royalty revenue from memory chipmakers.

And that would be welcome news for the Los Altos, Calif.-based company, whose shares are approaching their 52-week low, closing Monday's regular session at $14.18.

The newest product is XDR DRAM, or eXtreme Data Rate dynamic random access memory. Rambus says XDR is faster and consumes less power than the current memory interface, known as DDR2, used by Intel (INTC Quote) and other companies.

"The ultimate target is PC main memory," says Hughes, who will address investors Tuesday at the company's annual meeting in Palo Alto, Calif.

Of course, another struggle over technology is nothing new for Rambus. The company has been waging a multiyear legal battle worth billions of dollars with Infineon(IFX Quote), Micron Technology(MU Quote) and Hynix Semiconductor, all of which manufacture DRAM, the cheapest and most popular type of computer memory. The movement of the information between memory and microprocessors is where Rambus' products come into play.

Rambus scored a major deal in 1999, when Intel agreed to use its RDRAM, or Rambus DRAM, product for its new Pentium 4 chips. But Rambus' technology ultimately went nowhere after the memory chipmakers chose instead SDRAM, or synchronous DRAM, and its successor, DDR, or double data rate DRAM.