Rambus (NasdaqGS:RMBS) FY Conference Transcript

Rambus FY Conference Summary Company Overview - Rambus has over 35 years of experience in high-performance memory subsystems, providing leading ICs and Silicon IP solutions that enhance data center connectivity, addressing the bottleneck between memory and processing [3][4] Financial Performance - Patent licensing business generates approximately $210 million annually with a 100% margin, stable but not expected to grow long-term [4] - Silicon IP business generated $120 million last year, growing at 10%-15% annually [5] - ICs business projected to reach about $340 million this year, with a growth rate of 40% year-over-year, driven by data center demand [5] Market Dynamics - The market for interface chips is estimated at $800 million annually, with additional opportunities from companion chips adding $600 million, and further expansion into high-end client systems adding another $200 million [6][7] - Transition to DDR5 technology has created new chip opportunities, increasing the total addressable market (TAM) from $800 million to $1.4 billion [9] AI and Server Market - AI servers are driving demand for traditional servers, as they require both AI and traditional processing capabilities [10] - AI inference is expected to be a significant growth driver, as it is more cost-effective and simpler than AI training [11] MRDIMM Technology - MRDIMM technology doubles memory capacity and bandwidth on existing infrastructure, significantly increasing Rambus's content opportunity [12][14] - Expected rollout linked to next-generation platforms from Intel and AMD by late 2026 to early 2027 [15] CXL Opportunities - Rambus has a CXL offering as part of its Silicon IP business, but the market is fragmented, and the company sees MRDIMM as a more elegant solution for memory expansion [16][17] Silicon IP Business Strategy - Focused on security and high-speed interfaces, with a projected growth of 10%-15% annually [20][21] - Minimal exposure to China, with less than 5% of business from that market [22] Patent Licensing Insights - Patent licensing provides a stable revenue stream and insights into future technology trends, with contracts typically lasting 3 to 10 years [23][24] Financial Model and Capital Allocation - Patent licensing has a 100% gross margin, Silicon IP at 95%, and product business between 61%-63% [28] - Rambus aims to return 40%-50% of free cash flow to investors, having generated $300 million in cash from operations over the last 12 months [30] Competitive Landscape - Rambus maintains a strong position in hardware-based security against fast followers and internally developed solutions [34][35] - The company is developing quantum-safe security solutions in anticipation of future challenges posed by quantum computing [35] Conclusion - Rambus is well-positioned for growth in the evolving data center and AI markets, leveraging its strong patent portfolio, innovative technologies, and strategic focus on high-performance memory solutions [1][2]