Rambus Management Presents At Morgan Stanley Technology, Media & Telecom Conference (Transcript)

Rambus ( RMBS)

Morgan Stanley Technology, Media & Telecom Conference

February 29, 2012 05:45 PM ET

Executives

Sharon Holt – Head, Semiconductor Business Group

Satish Rishi – CFO

Analysts

Joe Moore – Morgan Stanley

Presentation

Joe Moore Morgan Stanley

Okay. We’re going to go ahead and get started in a couple of minutes. Great. Thank you. I'm Joe Moore. I think most of you know me by now. I just joined Morgan Stanley eight weeks ago as an analyst. More importantly Satish Rishi has been CFO of Rambus since 2006. Sharon Holt runs the Semiconductor Business Group at Rambus and has been in that role since 1994. So than you both for coming. I appreciate that. I think people have histories with Rambus from sort of a lot of different directions. So maybe it’s helpful if you give us a couple of minutes upfront sort of describing where you are right now, what things you guys are focused on as a management team right now and then we’ll go into detail.

Sharon Holt

Sure. I’ll give a brief overview. Just one correction. I joined in 2004. It was like 1994, wow, been here really a long time. So just to give everybody a bit of a common grounding because some of you may not know us this well, we’ve been around since 1990. We were formed during the PC age if you will and really on the premise, our two co-founders, Mark Horowitz and Mike Farmwald were very interested in the bottleneck that existed between the microprocessor and the memory which was holding back moving the PC platform forward and that was really the problem and the solution upon which the company was founded.

Most of the 90s were spent developing innovative memory architectures and working with our customers in the compute and gaming industries. Around the 2000 timeframe when networking became very important the company started taking some of the skills and technologies that had been learned and developed, working on memory problems and applying those to other high speed interface issues because the network industry was booming at that point.

Where we find ourselves today in early 2012 is we’re very focused on a l lot of the platforms obviously that are relevant now and that we believe are going to be relevant for several years to come, most notably, mobile platforms, what’s going on in servers and data centers connected to the overall mobility trend and a variety of consumer devices and of course solid state lighting. The company has changed a lot in the last few years as we’ve diversified from our roots and memory to include other kinds of semi-conductor technologies to lighting and display technology and last year we announced an acquisition of Cryptography Research here in San Francisco, getting us into the cryptography and security technology business.

We also have other research efforts going on internally and if you’ve seen any of our commercials we’d like to say we are a company of inventors and we really are. We’re a little over 450 employees, a vast majority of whom are engineers and scientists working in all of these different fields. Our business model is licensing. So we try to aim to have technology that’s relevant solving problems for big and growing markets because obviously with a licensing business model you get a small slice of the overall market and so that’s really been a premise driving our diversification strategy.

The more technologies we have that are relevant to these big and important markets, we believe that’s a great strategy to fuel our future growth as a company. Underpinning all our technologies of course is we believe it’s fundamentally important to have a solid IP position so that you have multiple ways to monetize your technology depending on how the market evolves. We ended last year with 1,400 issued patents and about another 1,100 in process.

So we’re continuing through our development efforts obviously to build a solid foundation for the future across all of our fields of focus. So that’s a quick summary.

Joe Moore Morgan Stanley

Maybe if we could start with DRAM and then other semis and we’ll move to some of the new businesses if that works. So I think your 93% semiconductor revenue, give or take now. Can you talk about how much of that comes from DRAM and how much of that is sort of solutions oriented, licensing versus patent licensing?

Sharon Holt

Yes, so we don’t break down the semiconductor revenue and report it in that way. As you can imagine we have some very large DRAM licensees. Samsung and Elpida of course that I think, folks are generally aware of. Our solutions licenses, we talked about, at company level we gave some numbers last year Satish?

Satish Rishi

Yes, we said non-patents were about 14%.

Sharon Holt

Okay. Yes. And so one of our goals, I talked in my opening remarks about developing new technology. One of the things we’re aiming for as we invest more in new technologies is to bring somewhat of a balance between those two parts of our business, a little more balance between the revenues coming in from patent licenses versus solutions license. I think we believe that’s strategically important because that means your new technology is being adopted which obviously gives us a pipeline for the future.

Joe Moore Morgan Stanley

Yes, on the DRAM side, are you still finding those opportunities? I know it’s been sort of an entrenched environment for solutions licensing?

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