Mosaid Technologies Inc. has initiated a patent licensing program that it expects to generate about $13 million in revenues in the company's current fiscal year.
Under the licensing program, Mosaid aims to strike new cross-licensing agreements with chip makers that will give it access to technology for system-on-a-chip designs as Mosaid positions itself as a fabless semiconductor supplier. Mosaid announced licensing agreements with NEC Corp. and Toshiba Corp. earlier this week, after reaching its first pact with Fujitsu Ltd. in January.
More agreements are expected, according to Mosaid officials.
"We have been diligent in patenting our unique inventions in memory chip designs, and now have over 60 patents," said George Cwynar, president and chief executive officer of Mosaid (Ottawa). "It is our belief that most, if not all, DRAM manufacturers are now using some of our patents in their products." Cwynar said he figures that over 20 companies are prime candidates for licensing agreements.
Mosaid started 25 years ago as a memory design house and expanded into a number of segments, including engineering memory test systems. Five years ago, the company began developing system-on-chip capabilities and designs of networking ICs. Now, Mosaid is preparing to become a fabless semiconductor company with system-on-chip product announcements coming up in the near future.
"We are making a transition from a design services/licensing business to a fabless semiconductor company," Cwynar said. "We anticipate these cross-licensing agreements to be valuable as we start to ship our own products."
In addition to gaining access to a range of functions and technologies, Mosaid said these licensing agreements will generate a steady royalty stream in the years ahead. In the company's last fiscal year, ended April 30, Mosaid reported total revenues of $22.8 million and a net loss of $10.2 million. In the prior fiscal year, revenues were $41.4 million, and Mosaid recorded net earnings of $5.2 million.
"Our patent licensing program is structured to provide Mosaid with multi-year payments of agreed sums, typically distributed over a two- to five-year term," Cwynar said. "We believe that our patented technology is in widespread use, and that it is difficult to engineer modern memory chips or new systems-on-a-chip incorporating DRAM without using techniques Mosaid has pioneered over the last decade.
"We are now in active discussions with several other semiconductor companies regarding licensing agreements, and based on the current and prospective licensing agreements, our patent licensing program should be a strong contributor to revenue and profitability for the foreseeable future," Cwynar said.