Rambus Shares Surge After Intel Deal
LOS ALTOS, Calif. (AP) _ Shares of Rambus Inc. surged 9 percent Monday after the designer of computer memory reached a five-year patent-sharing pact with chip-making giant Intel Corp. and raised its fourth quarter profit estimate.
Under the agreement that broadens and extends a 1996 deal, Intel will pay Rambus $10 million each quarter for access to its patent portfolio. Rambus also will have access to some of Intel patents, the companies said.
``This is a great deal for Rambus,″ said Avo Kanadjian, the company’s vice president of worldwide marketing.
Until last week, Intel’s flagship Pentium 4 microprocessor relied solely on the Rambus memory chip design. Some customers complained that those chips were more expensive than standard PC memory, though prices are now more inline with standard memory chips.
Intel last week started shipping a chipset that allows non-Rambus memory to be used with the Pentium 4. Executives at both companies maintain Rambus’ technology offers better performance.
The new agreement also will extend the Intel-Rambus partnership into networking and communications systems, Kanadjian said.
Rambus executives also increased the fourth-quarter profit estimate to 6 cents a share. Analysts surveyed by Thomson Financial/First Call were expecting a profit of a penny per share.
Shares of Los Altos, Calif.-based Rambus were up 48 cents, to $6.65, on the Nasdaq Stock Market. Shares of Santa Clara, Calif.-based Intel were down $2.41, to $23.66.
On the Web:
Rambus Inc.: http://www.rambus.com
Intel Corp.: http://www.intel.com