Rambus Shares Drop After Micron Files Suit

Rambus Inc.’s shares fell 4% on Tuesday after Micron Technology Inc. sued the semiconductor designer, claiming it violated antitrust laws and holds invalid patents.

Rambus shares, which have climbed more than fourfold this year, fell $3.38 to close at $80.63 on Nasdaq.

Rambus contends that its patents, some dating to 1990, cover a broad range of memory designs. Micron, the world’s No. 3 maker of memory chips, is the first in the $30-billion-a-year industry to challenge Rambus’ patent enforcement. Rambus said about 30 semiconductor companies have agreed to pay it royalties.

“We believe they violated federal antitrust laws and that certain patents of theirs aren’t enforceable,” Micron spokesman Grant Jones said.

In its complaint, filed Monday in U.S. District Court in Delaware, Micron said Rambus “has engaged in illegal and anti-competitive acts” to control the memory-chip market.

Rambus, based in Mountain View, said it will fight the lawsuit and is preparing a response to the allegations. Rambus said it had initiated licensing talks with Micron before the suit was filed.

The suit is a risk for Micron, analyst Mark Edelstone of Morgan Stanley Dean Witter wrote in a report. Rambus executives have said they won’t license their designs to any company they defeat in court, wrote Edelstone, who rates Rambus a “strong buy.”

Shares of Boise, Idaho-based Micron fell $2.06 to close at $87.25 on the New York Stock Exchange.

Rambus has declined to say how much it expects to collect in royalties. Some memory makers have chosen not to make Rambus chips because at one time the manufacturing expense was five to eight times that of other forms of memory. The price has fallen substantially in recent months.

Oki Electric Industry Co. last month licensed two memory-chip standards from Rambus, including synchronous dynamic random-access memory, or SDRAM. Micron said that SDRAM, which is widely used in personal computers, is an open standard.