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The nature of the company is IP. IP is probably best looked at in two timeframes to the extent that you can show a potential licensee that the technology will have more immediate value in either reducing the cost of their product or increasing the value in some way. It's more of a five-year time period from the time that technology was actually created till the time you can monetize to the extent that it then goes to a patent licensing world. It tends to go out to the 10th year. So, it's a – it is per se a long-term approach to technology.The attractive part of it is that you can give to an engineer relatively limited number of engineers, but the type of engineer who are interested in solving long-term problems often times the problem itself is clearly manifest or it's still fuzzy and that has allowed Rambus to continue to hire very, very capable engineers. And as I say, we have continued to rollout technology. Staying on that business, the semiconductor part of our business, we have under license right now, roughly $600 million to $700 million in licenses that were run between now to the expiration of those licenses, they tend to be five years, so between 2015 and a few years after. So, a significant amount of money embedded into the cash flow right now. As I said earlier, the primary focus has been on DRAM licensing. DRAM for quite sometime was basically lowest common denominator as set by the Intel interface requirement, such that as many people, as many manufacturers as possible could get over that bar and by – by so doing keep the price extremely low and the availability very high. But in the last five plus years, the market has really started to segment as do almost all markets of the size of the DRAM industry, which barriers between $25 billion and $40 billion. In particular, the needs of the mobile devices were significantly different than what would be required in a PC. It tends to be just one DRAM. It has to have significant bandwidth to the extent it can manage video etcetera. It has to be extremely low power and it has to be available.
On the other end of the spectrum in the server market, a relatively low percentage of time is DRAM and the large server actually address written to or read from roughly about 15%, that notwithstanding it is powered in essence the entire time so as to keep latency down. On both ends of that spectrum, Intel has – excuse me, Rambus has created a great deal – a great deal of technology and as the market has segmented, people have a position to protect than they are most interested in working with someone. When the market was standardized, it was very difficult to get revenue.And lastly, as you know the market has continued to produce fewer and fewer suppliers as a result I think DRAM prices are on their way north. I think it's far easier for Rambus to license someone who is making money and has a market that they want to protect. About five years ago, just to complete the story as we saw how difficult it was to be a relatively small IP licensing company and as we saw the things that we needed to be good at and obviously we set out to do that, we logically assumed that there will be other businesses that had roughly the same profile as Rambus relatively small, had groundbreaking technology, but it was having a great deal of difficulty licensing that technology. And as a result, we undertook a diversification project or process. Diversification, I don't think is a very good description. Often times, diversification means diversification. It's a completely different business and to the extent that one does well it offsets any difficulty in the latter. Our concept was well we are a licensing company there are relatively limited number of large companies from which we would look for licensing income, what are the attributes of those companies. Samsung, for example, Samsung obviously needs semiconductors, but Samsung makes a great deal of television, cell phones, etc., all of which have backlit screens. So, one of acquisitions, we did we thought would be applicable and relicensing Samsung and that is our lighting business – our lighting business. Read the rest of this transcript for free on seekingalpha.com