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Rambus makes money in DRAM downturn

But not as much as before

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Rambus, the pugnacious owner of all sorts of fast memory patents, many obtained legitimately, has turned in a profit for the December quarter, its Q3.

So it was down - $6.2m, compared with $13m for the same period last year, and $6.5m in Q2, but still it's a profit. Revenues were $24.9m, 28 per cent down on Q3, 2000 and 11 per cent on the previous quarter. The chip designer Royalties were $21.8 million, 13 per cent down on the previous quarter.

The company blames this mostly on DRAM price erosion during the period - and sure enough, Rambus RDRAM modules don't look so very expensive right now, up against the historically much cheaper DDR-DRAM fast memory competition (supplies for the latter have been a little tight recently).

But what impact have DDR chipsets, launched by SiS, VIA and Intel in recent months had on Rambus's business? The consensus is that it don't look too good for Rambus on the desktop, but that it should hold its own in the server market. We guess it will probably take a quarter, may be two, before the effect on Rambus' market share becomes clear.

Besides it's far too early to assess customer behaviour: Intel's contractual obligation to produce RDRAM chipsets only for the Pentium 4 was loosened as recently as last September, when the chip giant launched the i845, a chipset supporting cheap SDRAM memory. Intel officially launched a DDR chipset for the Pentium 4 this week, although it unofficially seeded system builder channels with product a month earlier at least.. Under its orginal terms with Rambus, Intel was barred from making its own DDR chipset for the P4 until 2003.

Sue, Grabbit and Runne

Rambus has been notoriously aggressive defending its intellectual property. But it suffered a major setback last year in its court case with Infineon in which it was found to have fraudulently obtained patents extending over DDR-DRAM. This means quiescence on the litigation front, and a side effect of making the company - strictly in the short term only - more profitable. Less litigation means smaller legal bills - down to $4.5 million in the December quarter, from $6.8m in Q2. ®

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