Wave Systems Corp. (fka WAVXQ)

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Here is a wave-like story unfolding...

Rambus Shares Up 12% On Talk Of Settlement With Micron
Tuesday December 30, 12:25 pm ET
By Peter Loftus, Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- Shares of Rambus Inc. (NasdaqNM:RMBS - News) rose 12% Tuesday on speculation that the computer-memory-chip maker would reach a legal settlement with Micron Technology Inc. (NYSE:MU - News) .


Around 12:30 p.m. EST, shares in Rambus were up $2.87, or 11%, to $29.37, on volume of seven million, double the daily average of 3.5 million.

The speculation was sparked by a Bloomberg News report Monday that Micron was in talks with the Department of Justice to win amnesty from prosecution by cooperating with a DOJ probe into possible price-fixing in the market for dynamic random access memory, or DRAM, chips.

The DOJ is investigating whether Micron conspired with Infineon Technologies AG (NYSE:IFX - News) , Samsung Electronics Co., and Hynix Semiconductor Inc. to artificially set DRAM prices. To win amnesty from prosecution, Micron might provide DOJ information to bolster a case against the other companies, and might admit it conspired with them, Bloomberg reported.

Micron and DOJ officials declined to comment on the talks. A Micron spokesman said the company doesn't anticipate being subject to a fine or penalty from the Justice Department.

A possible settlement between Micron and DOJ could bode well for Rambus. That is because investors believe it could lead to a settlement of ongoing legal disputes between Micron and Rambus, said Erach Desai, analyst with American Technology Research.

For one thing, Rambus could argue it was one of the injured parties in the alleged price-fixing, because such a scheme would have hurt sales of Rambus's own memory chips, Desai said.

Also, Rambus has been embroiled in a patent-infringement case against Micron and others. Rambus has sought to collect royalties from Micron for its use of memory technology that Rambus believes infringes upon its patents.

Some memory-chip makers already have agreed to pay Rambus royalties, including Samsung. But others, including Micron and Infineon, have held out.

Complicating matters, Micron and others have accused Rambus of deceiving a standards-setting body for memory chips during the 1990's by failing to disclose it had patents related to DRAM. The Federal Trade Commission has made similar accusations, and a federal judge is now considering the FTC's charges following a trial earlier this year.

If Micron gets amnesty from the DOJ, it could reach a settlement with Rambus that includes an agreement to begin paying royalties to Rambus, Desai said.

The movement in Rambus's shares Tuesday illustrates how the twists and turns of its legal battles have weighed on the minds of investors. Earlier this month, Rambus shares fell 14% the day after a federal judge said he needed more time to rule on the FTC lawsuit against Rambus. But a few weeks before that, Rambus shares jumped 17% amid speculation of a favorable ruling in the FTC case.

Rambus officials couldn't immediately be reached.

-By Peter Loftus, Dow Jones Newswires; 201-938-5267; [e-mail]

Micron spokesman David Parker said the ongoing Justice Department investigation of the memory-chip market is unrelated to the cases against Rambus by Micron and the FTC.

-By Peter Loftus, Dow Jones Newswires; 201-938-5267; [e-mail]

http://biz.yahoo.com/djus/031230/1225000567_4.html