Samsung settles with Rambus for $900 million

Samsung Electronics and Rambus say they have reached an agreement settling all claims between them.

Samsung Electronics and Rambus said Tuesday that they have reached an agreement settling all claims between them and the licensing of Rambus' patent portfolio for all Samsung semiconductor products.

Under the agreement, Samsung will initially pay Rambus $200 million. In addition, the South Korean electronics company will make quarterly payments of about $25 million over five years and agree to purchase $200 million worth of Rambus stock. In total, about $900 million.

The agreement includes a perpetual fully paid-up license to certain current dynamic random access memory (DRAM) products. DRAM chips are used as the main memory for PCs.

In addition, Samsung and Rambus have signed a memorandum of understanding covering a new generation of memory technologies which combines Samsung's and Rambus' memory technologies. Rambus' expertise lies in high-performance memory interfaces.

The two companies will initially focus on graphics and mobile memory solutions and will further review a potential collaboration on server and high-speed NAND flash memories, the companies said.

The settlement came just as Rambus was set to go to trial against Samsung, Hynix Semiconductor, and Micron Technology.

Rambus has a long and convoluted history of lawsuits and legal action. In May of last year, the Federal Trade Commission dropped its antitrust case against the company, after the U.S. Supreme Court rejected an FTC appeal. This followed an appeals court decision that threw out the FTC's findings that Rambus intentionally withheld its patent plans from a standards body, which later sanctioned certain Rambus technology that is found in many PCs and servers around the world.

The FTC was seeking to limit the amount of royalties--the main source of Rambus' revenue--the chip designer could collect on DRAM.

Micron Technology Inc., Hynix Semiconductor, and Nanya Technology lost a federal court trial in which they made similar antitrust allegations.

Rambus continues to pursue claims against Micron Technology and Hynix Semiconductor, among others.

Updated at 6:30 p.m. PST: throughout.

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