Oki bows to Rambus pressure

Another memory manufacturer toes Rambus' line, acknowledging the company's patents on basic memory technology
Written by Will Knight, Contributor and  Matthew Broersma, Contributor

Computer company Oki Electronics agrees to pay Rambus Friday for the use of SDRAM and Double Data Rate (DDR) SDRAM memory and controllers.

Oki is the latest to license the technology under a controversial patent claim by Rambus, which covers essential technology underlying SDRAM memory. SDRAM is the standard form of memory used in personal computers.

Some industry representatives allege that Rambus failed to declare patents when it became involved with the Jedec (Joint Electron Device Engineering Council) committee, which developed the SDRAM standard.

Toshiba and Hitachi, two of the world's largest memory manufacturers, agreed earlier this month to license the SDRAM and DDR SDRAM technology from Rambus, ending a long-running legal dispute.

Rambus denies it has used underhanded tactics to gain market advantage. "Our objective is to produce innovations that will benefit the semiconductor and systems industries," says Geoff Tate, chief executive of Rambus. "By licensing these innovations to generate a return on investment to our shareholders."

Analysts acknowledge Rambus' actions seem odd, to say the least. "If Rambus had already patented stuff discussed in the forum, you would think they would have mentioned it," says principle analyst at Dataquest Richard Gordon.

But he describes patent disagreements as "totally standard" in the semiconductor industry.

Experts say Hitachi and Toshiba's move into Rambus' camp means that most smaller manufacturers, such as Oki, will follow suit and take out Rambus licences. "This agreement ensures that Oki has rights to these important Rambus patents which are necessary for current and future memory and logic products," said managing director of Oki Dr Masayoshi Ino in a statement.

If the semiconductor industry accepts Rambus' patents as valid, Rambus will be well positioned to profit from the next generation of memory technology. Intel has already agreed to use Rambus' RDRAM technology with its Pentium 4 processor, scheduled to arrive later this year, and only recently announced it will also support cheaper SDRAM.

But if manufacturers choose to go with DDR SDRAM, a technology that competes with RDRAM, Rambus will now be able to profit from DDR SDRAM licenses.

It's also worth noting that the royalty rates for DDR SDRAM and the DDR controllers are greater than those for RDRAM. This could drive up the price of DDR SDRAM, whose lower cost has been one of its advantages over RDRAM.

"It now appears that Rambus will have a significant share in the memory market -- no matter where the market goes from here," wrote analyst Peter N Glaskowsky of Microprocessor Report in a recent report.

Oki is the world's tenth largest supplier of DRAM with approximately $450m (£296) in DRAM sales.

See Chips Central for daily hardware news, including an interactive timeline of AMD and Intel's upcoming product launches.

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