POST OF THE DAY
Rambus, Inc.
Why I'm Still Confident

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By nukejohn
November 4, 2003

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Anyone who has followed this case over the past 3-4 years knows what really happened, and we also know the "pain" of a home court decision (i.e. Richmond). Could the FTC make another "home court" decision? Absolutely. Will they? I think not and here's why....

If Rambus gets an unfavorable ruling they will appeal. Even though it could take another 2-3 years to ultimately straighten this mess out, we all know that in the end, when this case is decided on the merits in front of a real court, Rambus will win.

What are the consequences when Rambus wins? Rambus can make Micron, IFX and Hynix (assuming they are still in business) pay whatever rates they want, or put them out of business. Do you think Micron's BOD will allow this to happen? If they do, boy, talk about shareholder lawsuits. Also, XDR seems to be gaining a lot of momentum. If XDRAM can really be used in PC's (which now looks to me like a foregone conclusion), then the three amigos will be so far behind in 2 years, they will never ever be a factor in DRAM manufacturing again.

Do you guys remember the names of Philco-Ford, Sylvania, and Magnavox? These were some of the big US TV manufacturers in the 1950's and 60's. They failed to adapt to the color TV market. If you are a MM and you fail to adapt, you will go the way Philco-Ford, et al. Micron cannot risk an Appellate Court ruling striking down a BS FTC ruling and completely validating Rambus patents. So, even if the FTC rules against Rambus, Micron would still be likely to settle because they are scared to death of the consequences of a successful Rambus' appeal. If they don't settle, they would also be watching most of their big competitors signing XDR agreements with Rambus, while they are stuck with higher manufacturing costs on DDR (because they didn't upgrade their fabs like Samsung). The only way for Micron to avoid bankruptcy is some type of government intervention so that the U.S. will not lose its only DRAM manufacturer. I view this as a highly likely scenario, but this is not bad, because I would rather have Micron a healthy company (paying Rambus lots of royalties), than a bankrupt company with no back payments for DDR royalties.

Rambus still holds all a royal flush, and the amigos are still bluffing. By not asking for dismissal (I agree with IdoTrash' assessment), Rambus has decided to go "all in". They want a ruling from the ALJ. If they are exonerated...that's fine. If they judged to be guilty of anything...then it's on to the Appeal.

Just remember my Perfect Storm post. My timing may have been off, but the perfect storm is coming.

NukeJohn


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