The lawsuits involving Rambus could help determine the fate of several companies in the DRAM industry.
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Future of memory market hangs on Rambus trials
Intel has been eager to foster next-generation DRAM memory technology with speeds high enough to keep up with the rapid increase in its own processor speeds. Five years ago, Intel said it would support the architecture proposed by Rambus, and Rambus wants the PC industry to standardize on its proprietary DRAM architecture to maximize volume.
Although some DRAM manufacturers support Rambus DRAM (such as Samsung Semiconductor and Toshiba), Hyundai, Infineon and Micron--which are three of the industry's four major vendors--do not, for several reasons. They do not want to ramp up production until the market has developed; so prices for Rambus DRAM remain high. In addition, they do not want to pay royalties to Rambus; they could lose control of the industry to another technology pacesetter; and the Rambus architecture would also boost Intel's control over the industry.
For its part, Intel needs the support of many DRAM manufacturers to supply DRAM in large enough volume to keep up with sales of its microprocessors, such as Pentium 4, which for now uses only Rambus memory. Moreover, Intel is concerned about the high cost of Rambus DRAM. Accordingly, Intel recently changed course a bit by saying that future processors will also use DDR, as a lower-cost, high-speed DRAM architecture, later in 2001.
Intel rivals such as Advanced Micro Devices have also seen an opportunity here to gain market share and have promoted DDR DRAM as an alternative to the Intel-Rambus solution.
In response, Rambus has asserted in the lawsuits started by the DRAM manufacturers that it also owns patent rights over synchronous and DDR DRAM technologies. If the courts uphold Rambus' claim, the vendor will charge manufacturers a high royalty payment for use of the technology. The high royalties will be designed to force manufacturers back to Rambus' DRAM architecture.
The lawsuits are a bit of a high-stakes gamble. Rambus really needs DRAM memory manufacturers to support its technology, but lawsuits could leave the two sides farther apart. In general, lawsuits are expensive and often distract a company. Some of Rambus' targets can ill afford to battle in court. For example, Micron is involved in several sets of litigation in various countries around the world; this situation could seriously stretch its legal resources.
Whatever the outcome of the legal cases, the biggest loser will be the wider semiconductor industry. There is bound to be a loss of confidence in the ability of companies to work collectively under the auspices of bodies like Joint Electronic Devices Engineering Council to produce industry standards, and this dispute can only hold back future semiconductor development.
(For related commentary on Intel and Rambus and the types of RAM that are in the market, see TechRepublic.com--free registration required.)
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