Rambus Unit & Fairchild Ink Licensing Deal - Analyst Blog

Recently, Rambus Inc.'s RMBS division, Cryptography Research, Inc. CRI signed a patent licensing agreement with Fairchild Semiconductor Corp. FCS for an undisclosed sum.

Per the terms of the agreement, FCS will be able to use CRI's patented Differential Power Analysis (DPA) countermeasures and CryptoFirewall core security technology across a wider range of products. The technologies will secure FCS' tamper-resistant integrated circuits. Leveraging Rambus' patent portfolio, FCS will bring in more innovative technological solutions for end users.

On the other hand, Rambus can use FCS' software design tool for its integrated circuit products. With this, Rambus can deliver low-power-consuming chips even at lower nodes. Discovered by CRI, DPA is an attack which analyses the fluctuating electricity usage of a device and the encryption key it encloses. DPA countermeasures help to protect users against tamper-resistant devices by examining the power consumed by it.

FCS is a developer in the semiconductor industry and provides low- to high-power solutions for mobile devices, cloud, automotive, LED lighting, and computing industries. These technologies help to provide new and advanced features and enhance the overall efficiency of industrial products.

Licensing agreements are a recurring revenue source for Rambus, the result of successful monetizing of its patents. In the fourth quarter of fiscal 2013, the company reported customer licensing income (including patent royalties received and gain from settlements) of $73.8 million compared with $61.6 million in the year-ago quarter. The year-over-year growth was mainly due to the new license agreements signed with SK Hynix, Micron Technology Inc. MU, ST Microelectronics and LSI Corporation LSI.

Rambus' patented technologies are of great importance to chipmakers for manufacturing advanced chips used in computers and electronic goods. Rambus has already licensed its technology to Fujitsu Semiconductor Ltd., NVIDIA Corp. NVDA, Broadcom Corp., Micron Technology and MediaTek Inc. for their respective integrated circuit products.

Most recently, Rambus signed a 5-year patent licensing agreement with Nanya Technology Corporation.  Per the agreement, Nanya can use Rambus' patented technology for its DRAM products through the second quarter of fiscal 2018.

With the rising popularity of energy-efficient lighting, LED products are finding place in the latest architectural, retail, commercial and residential lighting fixtures. We find Rambus in a favorable position to capitalize on this opportunity.

Currently, Rambus has a Zacks Rank #1 (Strong Buy).