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
, 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
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
, 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.
Rambus has alleged that SDRAM and DDR were both derived from its RDRAM technology, which the company claims was kept out of the market by the illegal collusion of the memory chipmakers.
Several major memory makers did agree to license Rambus' technology, including
. But Infineon, Micron and Hynix decided to challenge Rambus' patents.
Last month, Rambus settled with Infineon -- its most contentious case --
making it a licensee. But Rambus still has cases against Micron and Hynix, alleging patent infringement, as well as an upcoming collusion case against memory chipmakers.
Separately, the Justice Department is conducting a grand jury price-fixing investigation into memory-chip manufacturers that covers the period from 1999 to 2002 -- the same period during which RDRAM and DDR faced off. In the past eight months, both Hynix and Infineon have pleaded guilty to illegally fixing prices; Samsung and Micron are also targeted in the probe.
Rambus says that the guilty pleas and evidence from the DOJ investigation, as well as its own investigation, validate that its DRAM technology was unfairly kept out of the market. With that as a backdrop, the company sees Intel as now having a compelling reason to justify a switch to using Rambus' XDR interface.
This would be a significant shift. Intel has used DDR since 1999, and with Intel putting its processors into four of every five computers made, its needs can effect massive changes among suppliers.
Intel's public product roadmap doesn't extend past 2006, which means it hasn't yet publicly committed to the next-generation DDR3. An Intel spokeswoman declined to comment on Intel's memory plans beyond its support of DDR2 for the current year.
Coincidentally, the end of 2006 also marks the expiration of the current cross-licensing deal between Rambus and Intel. Rambus will likely kick renegotiations into high gear in the coming quarters. As Hughes put it, "The journey is at a start."
The companies' current deal already has Intel in a position to tinker with XDR because the technology is covered in the current agreement. However, the licensing pact is essentially a basic permit allowing Intel to access the patents, but not necessarily additional information or techniques to maximize XDR's performance. A logical take-up point for the interface would also occur in 2006, when Rambus launches its second-generation XDR.
XDR is touted as ideal for improving graphics performance, a feature of growing importance as computing chips are increasingly found in consumer-electronics products, in addition to their pivotal role in high-end computers built especially for gamers. XDR has already been tapped for inclusion in
PlayStation 3 as part of the Cell processor codeveloped by Sony,
, seen as being used in high-definition televisions, computers and game machines.
This could be another incentive for Intel to move to XDR. "The Cell chip poses a big threat to Intel's traditional market," says Mike Crawford, director of research at Barrington Partners, a Santa Monica, Calif.-based hedge fund. "One way that Intel might be able to maintain its competitive edge is to incorporate XDR into its own designs."
And even though any financial benefits wouldn't be seen for an extended period, Crawford sees Rambus' assertiveness as a positive. "XDR is probably still too advanced for the PC market, but it is important for Rambus to get back on
Still, this isn't a done deal.
Crawford says there is still the cautious overhang from the last time Intel said it wanted to move in Rambus' direction, which prompted the revolt by the memory makers and the resulting litigation. He says, though, that the landscape is different and he doesn't see the memory chipmakers as likely to respond as they did in the past.
Perhaps more importantly, Intel has been on the DDR plan for several generations, and the shift to a new technology by a giant such as Intel would cause huge ripples up and down its supply chain.
"While Rambus has designers who will help out and provide original controller designs to those companies who want to use XDR in their products, redesigning a memory controller for a specific product may be a hard sell for a lot of companies who are already entrenched in DDR," says Jon Peddie, president of Jon Peddie Research, a specialist in the graphics-chip industry.
However, one possible answer, says analyst Erach Desai with American Technology Research, could be Intel signaling that it would use both XDR2 and DDR3.
Regardless, Hughes' public commitment to moving Rambus in Intel's direction indicates that he wants everyone to know exactly where the company is headed. And this time, it doesn't involve a courthouse.