Intel, Networking, and Royalties

FiringSquad: Does Intel own any portion of Rambus?

No. It's a common misconception. Intel does not own any part of Rambus Inc. Rambus is closely associated to Intel because Intel has selected Rambus as its memory of choice. Rambus does have in place a warrants program for partners who meet certain milestones, such as engineering validation, production volume and market share.

FiringSquad: What kind of milestones does Intel have to reach in order to gain the rights to those Rambus warrants?

Intel's warrants are tied to achieving motherboard and chipset volumes.

FiringSquad: Many people know Rambus as a player in the PC memory industry, but Rambus technology is also present in game consoles such as the Nintendo 64 and the PlayStation2. Does Rambus plan on extending into other markets besides the consumer electronics and computer markets?

Yes. Rambus technology is very well suited for applications requiring high-speed chip connections and high performance memory. Recently, Rambus and several leading network communications companies have announced new products containing Rambus technology. The low pin count, high bandwidth Rambus technology is key to their platforms.

FiringSquad: What kind of networking products currently feature Rambus technology?

We see our various technologies, the RDRAM and RAC, used in different parts of network processors, line cards and back planes today. Separately from RDRAMs and RACs, Rambus has also recently announced a new Serializer/Deserializer cell, or SerDes Cell, for use in high-speed back planes.

FiringSquad: Can you tell us more about the Rambus royalty on RDRAM? What is the size of the royalty?

All companies have a royalty on IP that they own. In exchange for the Rambus royalty, Rambus shares IP that enables next generation chip connections technology. Royalty rates vary per customer. Analysts have said they believe the rates to be between 1-2% for DRAM and 3-5% for logic products.

FiringSquad: Let's say that Dell sells an end user a 128MB stick of PC800 RDRAM for $600. How much does Rambus make off that single transaction? Would Rambus make less if the price fell to $100?

OEMs like Dell do not pay royalties to Rambus. The semiconductor partners pay a royalty to Rambus based on their sales price. Over time, as volumes increase, price will come down and the royalty paid to Rambus decreases proportionally.