Tech Industry

Rambus gains on Toshiba deal

Rambus (Nasdaq: RMBS) flew up 30 percent Friday after a four-for-one stock-split took effect and a deal with Toshiba Corp. which could signal more revenues from patent licensing ahead was announced.

Shares in the company, which licences its intellectual property to semiconductor makers, were up 17 1/4 to 73 15/16. The stock made modest gains since it toppedsecond quarter estimates.

Rambus also got upgraded Friday to a ``strong buy'' from ``outperform'' by analyst Mark Edelstone at Morgan Stanley Dean Witter.

Toshiba has been developing, manufacturing and selling Rambus' technology since 1990. The new agreement covers patents for high-speed memory interfaces being implemented in SDRAM, DDR SDRAM and DDR FCRAM memory.

The deals' significance extends beyond Toshiba -- the deal may validated Rambus' intellectual property in DRAM, putting the heat on other customers, such as Samsung, Micron (NYSE: MU), Hitachi and Hyundai to start talking with the company about licensing synchronous DRAM, a more traditional memory standard that accounts for about 80 percent of shipments. This could mean a big uptick in revenue for Rambus.

Aside from licensing RDRAM designs to about 30 companies, Rambus also earns royalties, which account for nearly 20% of sales, on the sale of these manufacturers' Rambus-based products.