Rambus may be set for US$10b court triumph

Rambus Inc, the designer of chips for Sony Corp's PlayStation video-game console, might collect royalties of as much as US$10 billion, six times its market value, by winning a seven-year fight with Hynix Semiconductor Inc.

After claiming the world's second-largest memory-chip maker infringed on patents it owned, Rambus won a US$133.4 million award in 2006, Bloomberg News reported.

To collect, it must now win a trial next month over the South Korean manufacturer's claim that the Los Altos, California-based company illegally used information obtained at industry meetings in the 1990s to get the patents.

A Rambus victory probably would include a court order barring Hynix and other manufacturers from selling the chips, said analyst Michael Cohen of Pacific American Securities. That would allow the memory designer to seek royalties of US$700 million to US$10 billion, or US$97 a share, Cohen said. A loss might make the patents unenforceable, pushing Rambus shares down more than a third, he said.

"There's really a lot at stake here because this is the conduct trial for not just the past but current and future memory types as well as multiple manufacturers," Cohen said. He has a "buy" recommendation on Rambus.

A victory for the company in the San Jose, California, trial would apply to the United States and give it leverage to demand inter- national royalties, Cohen said.