Mitsubishi inks Rambus memory license deal

Mitsubishi inks Rambus memory license deal
MANHASSET, N.Y. — Mitsubishi Electric Corp. has become the latest in a growing list of memory makers who have agreed to pay royalties to Rambus Inc. for SDRAM and double-data-rate (DDR) SDRAM memory, technologies many deem to be freely available.

As it had in previous agreements with major memory makers, Rambus will charge more in royalties for double-data-rate SDRAM than it does for direct Rambus and less for the older SDRAM technology. Rambus asserts rights to some SDRAM patents, claims that have spawned a rash of royalty agreements as well as a spate of lawsuits.

Avo Kanadjian, vice president of worldwide marketing at Rambus (Mountain View, Calif.), said the agreement, signed at the end of December, covers shipments by Mitsubishi of the licensed memories and controllers that directly interface with these types of memory. The deal is retroactive to July 1, 2000, when negotiations began.

"It's safe to say they are signing early enough to get preferred rates," Kanadjian said. Royalty rates were not made public.

Analysts generally downplayed the significance of the deal, saying Mitsubishi is now a relatively small player in the DRAM market. Signing is also expected to have little impact on pending lawsuits in Germany, France and the United States.

Mitsubishi officials were unavailable for comment. But semiconductor group senior vice president Koichi Nagasawa said in a prepared statement that the agreement represented "the best decision" the company could make.

Major memory makers Samsung, NEC, Toshiba, Hitachi, Oki and Elpida have so far signed SDRAM and DDR SDRAM license agreements. But Infineon, Micron and Hyundai object to paying royalties and are fighting Rambus in a series of international lawsuits. Micron fired a preemptive strike last August, complaining in U.S. District Court in Delaware that Rambus is trying to assert patent rights on SDRAM and DDR technologies that were developed under open standards of the Joint Electron Device Engineering Council (Jedec).

Like many of its Japanese competitors, Mitsubishi has suffered heavy losses due to oversupply and plummeting DRAM prices and has cut its production of commodity DRAMs. In 1999, the company steered its semiconductor group into developing system-on-chip and the company's eRAM products as part of a companywide reshuffling of business groups. Last summer, Mitsubishi said it would boost spending on production equipment for semiconductors by 50 percent to $1.3 billion (150 billion yen), largely to ramp production of flash memory for cellular phones. Dataquest Inc. now ranks Mitsubishi eighth among the world's DRAM suppliers, far behind the market leaders, with revenue of $875 million and 3.8 percent market share in 1999.

Among Japanese memory makers, Fujitsu Corp. now remains the only major company not to have signed some version of an agreement to pay royalties on SDRAM and DDR manufacture to Rambus. Fujitsu did have a license with the company for RDRAM but has declined to renew it. Kanadjian would not say whether Rambus was talking with Fujitsu either on renewing Fujitsu's RDRAM license, or the company's SDRAM and DDR claims.

"Any more licensing deals from here on in are just noise," ahead of lawsuits in Germany, France and the United States, said Bert McComas, founder of InQuest Market Research (Phoenix).