Toshiba caves to Rambus, industry quakes

— 6:15 AM on June 16, 2000

Dr. John sent word of this alarming agreement just worked out between Toshiba and Rambus. Here's the meat of it:

MOUNTAIN VIEW, Calif.--June 15, 2000--Toshiba Corporation and Rambus Inc. (Nasdaq:RMBS) today signed a new patent license agreement for SDRAM, Double Data Rate (DDR) SDRAM, DDR FCRAM memory and Controllers that directly interface with these types of memory.

Toshiba has been developing, manufacturing and selling Rambus compatible IC's since 1990. The new agreement covers patents for fundamental aspects of high-speed memory interfaces invented by Rambus, which are currently being implemented in SDRAM, DDR SDRAM and DDR FCRAM memory and controllers which directly interface with these types of memory.

Under the licensing agreement, the royalty rates for DDR SDRAM and the controllers, which directly interface with DDR SDRAM, are greater than the RDRAM compatible rates. [Emphasis mine.] The agreement also includes royalties for SDRAM and for controllers that directly interface with SDRAM, as well as a license fee for the entire agreement.

In essence, Toshiba has legally acknowledged the validity of Rambus' patents on high-speed memory designs. This means Toshiba will pay Rambus a licensing fee in order to make the most common and cheapest type of memory out there today, SDRAM. Naturally, Rambus has set up a pricing structure that favors RDRAM over DDR memory. This is huge.

You can see Dr. John's quick rant on the topic if you don't believe me. If this deal sets an industry-wide precedent, it'll turn the whole high-tech hardware market (everything, not just PCs) on its ear. Not to mention making Rambus and its stock owners very, very wealthy.

Update: Azonic's got more to say about this issue right here.

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