Why Rambus Shares Popped

Is this meaningful, or just another movement?

Evan Niu
Evan Niu, CFA
Jun 12, 2013 at 3:19PM
Technology and Telecom

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Rambus (NASDAQ:RMBS) have popped today by as much as 10% after the company settled a long-standing patent dispute with rival SK Hynix.

So what: The two companies have entered into a five-year patent license agreement where SK Hynix can use Rambus' memory-related patents in its semiconductor products. The agreement includes quarterly payments of $12 million to Rambus related to DRAM products.

Now what: Rambus and SK Hynix have now settled all outstanding patent claims. Rambus CEO Ron Black called it a "milestone agreement" that allows the two companies to collaborate and focus on the future. The SK Hynix settlement is the latest in a string of other licensing deals that Rambus has scored with other chip makers, although it lost a major suit to Micron last year.

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