Analysts who cover Nvidia were generally unmoved by the decision. Some analysts did cut estimates for Nvidia Tuesday (July 27), though they cited other reasons such as sluggish traction for the company's Tegra product line and lukewarm reviews for its Fermi products.
But analysts don't believe the ITC ruling will result in an actual ban on the importation or sale of Nvidia products, and neither does anyone else.
"At the end of the day, it is not in Rambus' best interest to stop Nvidia's products from shipping as the company is seeking royalty income for related memory IP," wrote Doug Freedman, an analyst at Gleacher & Co., in a report circulated Tuesday.
Nvidia already has a strategy in place to bypass the ITC's limited exclusion order, and it's pretty foolproof. Assuming that U.S. President Barack Obama doesn't set aside the ruling during the 60-day review period (it's unlikely he will do so), Nvidia will simply take a the five-year license on the Rambus technology that Rambus was required to offer under the terms of a 2009 settlement with the European Commission, the regulatory arm of the European Union.
This--or something similar to it--is what Rambus has wanted all along. As Freedman notes, Rambus has no interest in blocking the sale of Nvidia chips. The company simply wants a piece of the action that it believes it is entitled to by virtue of its patent position. Nvidia and others have been reluctant to pay up, but Rambus hopes the ITC decision will change that.
Sharon Holt, senior vice president of licensing and marketing at Rambus, noted in an analyst conference Tuesday that the ITC decision found Nvidia's products infringe on the so-called Barth patents, as opposed to the company's original Farmwald-Horowitz obtained by the company's founders.
"It is very positive for us to have some of the newer patents in the portfolio affirmed in this way," Holt said. "And I think existing and potential licensees will take note of that."
Holt went on to note that while Rambus has been successful in obtaining licensing agreements for its technology among memory vendors (often through litigation), the Nvidia decision could open up more potential licensing revenue among companies that sell processors with integrated memory controllers, a much larger pool of potential licensees.
"We certainly hope that other potential licensees that are sitting on the sidelines will take notice," she said.
It comes as a small solace for Rambus as a company though it surely is some good amount of cash. But in the longer term Rambus should be seen moving towards some common framework for memory with international standards and participate in the technology migration. It doesn't help them if they innovate in isolation and demand huge premiums when the general chip market don't actually need those blazing speeds badly.
The ITC order is very broad and the European deal does not cover GDDR5.
here is the link to the original LEO (bottom of page)
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