Hitachi cracks, pays tribute to Rambus

— 1:31 AM on June 23, 2000

In the wake of Toshiba's decision to pay royalties to Rambus for all of their SDRAM-based products (see our story and Jer's rant on the subject), Hitachi has decided to settle with Rambus and pay up, too. Here's an analyst bite on what now looks like the inevitable outcome of this one:

"The Rambus patent is very, very strong. We think other companies are going to follow, and make it difficult for other companies to resist," ING Barings analyst Peter Wolff said.

Wolff said the cost of the royalty payments by Hitachi and other chip makers would likely be passed through to customers and that the impact would not fall disproportionately on any one company.

So it's kinda like Communism. :)

Beyond taking royalties on every bit of SDRAM made anywhere, Rambus is looking to use their patents to squeeze cash out of chipset makers, who include SDRAM memory controllers in their products:

Without naming names, Kanadjian stressed that not just memory but also makers of the controllers that interface with memory chips could be affected by his company's patent claims, including dozens of the industry's largest chipmakers.
If it all works, they'll be making cash hand-over-fist in Rambus country. As one might expect, Rambus stock has surged like so many bits of data over a DDR interface.

To cap it all off, the company again confirmed that they'd use royalties as leverage against DDR SDRAM, as well:

In a statement, Rambus said the Hitachi deal would make royalty rates for DDR SDRAM and related controller devices greater than the Rambus Dynamic Random Access Memory (RDRAM) rates, which Rambus sees as a rival product.

"Since DDR was really invented by Rambus, we feel a higher royalty is justified," he said.

So we're all getting RIMMed.
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