Semiconductor Ip

Electronic News, April 23, 2001

Editor's Note: This is the beginning of SIP Trends 2001. Over the next few months, Electronic News will be profiling the Top 10 public companies in the semiconductor intellectual property space based on the chart above. This week ENews profiles ARM Holdings plc and Ram bus Inc., the No. land No. 2 public companies, respectively, in the SIP market, according to Cahners Research.

ARM Holdings plc

110 Fulbourn Road Cambridge CB1 9NJ, England

44-1223-400-400

www.arm.com

nasdaq: ARMHY

Public

Fiscal-Year Information:

Year End: 12/31

IP Revenue (Calendar-Year 2000):

$129.5 million (estimated)

FY Revenue           FY Net Income
                     (after taxes)
2000        $150.6M         $43.9M
1999        $100.1M         $26.2M
1998         $70.3M         $10.1M
1997         $43.7M          $4.8M
1996         $28.6M          $4.5M

Revenue Percentages by Region:

North America: 55%

Europe: 20%

Asia: 25%

ROW: 0%

Number of Employees:

2000: 619

1999: 443

Key Management:

Robin Saxby, Chairman, President, and CEO; Warren East, COO; Jonathan Brooks, CFO; John Herring, CIO

IP Product Description

16/32-bit embedded RISC microprocessor cores

Second-Half 2001 Outlook:

ARM Holdings plc reports that sales of its intellectual property (IP) development kits more than doubled in the first quarter of 2001, which bodes well for the designers of microprocessor cores. Robin Saxby, the company's chief executive officer, stated this activity indicates a healthy level of design activity by the company's end-consumers, which could translate into more unit shipments and royalty revenues in the second half of the year. ARM development kits were shipped out to a broad array of end-markets and geographic regions.

ARM expects unit shipments of more than 400 million units, which will be an increase from 367 million units in 2000.

ARM is also encouraged by the developments in the software camp, which could also spur growth. Santa Clara, Calif.-based Palm Inc., maker of best-selling PDAs, will go to an ARM architecture in future products. Symbian, Microsoft and Linux are also queuing up to offer software for ARM-based microprocessors, according to the company's financial statements.

ARM continued to line up a number of licensing agreements in the first half of the year, and that should translate into continued revenue growth in the second half of the year while the rest of the industry experiences an economic downturn.

ARM also continues to make improvements to its cores, which will make them more attractive to a broader base of end-applications, further diversifying the company's customer base. While ARM's greatest success came in the cellular handset business, a company representative recently disclosed that more and more cores are being designed into network platforms, industrial applications, consumer entertainment devices and storage applications.

Rambus Inc.

4440 El Camino Real

Los Altos, CA 94022

800-726-2879

650-947-5000

www.rambus.com

nasdaq: RMBS

Public

Fiscal-Year Information:

Year End: 9/30

IP Revenue (Calendar-Year 2000): $95.1 million

FY Revenue          FY Net Income
                    (after taxes)
2000        $72.3M         $21.5M [*]
1999        $43.4M          $8.7M
1998        $37.8M          $6.8M
1997        $26.0M         $2.0 M
1996        $11.3M         $-4.4M
(*.)PRO-FORMA

Revenue Percentages by Region:

Unite' States: 19%

Europe: 5%

Asia: 76%

ROW: 0%

Number of Employees:

2000: 175

1999: 166

Key Management:

William Davidow, Chairman; Geoff Tate, CEO; David Mooring, President; Gary Harmon, SVP, Finance, CFO and Secretary

IP Product Description:

Scalable-bandwidth, chip-connection technologies for semiconductor memory devices and ASICs

Second-Half 2001 Outlook:

Although Rambus is deep in legal battles with three major DRAM companies--namely Hyundai, Micron and Infineon--Geoff Tate, chief executive officer at Rambus, said that royalties are continuing to increase for the company based on Rambus DRAM (RDRAM)-compatible chips. He added that the company expects those royalties to continue to grow as more PCvendors move to RDRAM-based systems.

Although Tate admitted that prices on RDRAM have declined, increased volume of the chips will offset the decline in price, he said. Also, the continued market expansion of PlayStation2 by Sony and the adoption of Intel Corp.'s Pentium 4 processor by more PC OEMs should add to Rambus' royalties in the coming quarters, according to the company.

As far as its royalties on SDRAM, the company saw a decline last quarter due to a reduction in ASPs on SDRAM modules by as much as 50 percent, Tate said. The company expects this trend to continue going into the next quarter as Rambus currently derives most of its revenue from SDRAM royalties. The company anticipates that it may experience an overall decline in total revenues by as much as 29 percent next quarter, give or take a few percentage points, Tate added.

Regarding the ongoing legal battles, Tate said that the company expects to see some decisions in this litigation during the next quarter. Tate added he is highly confident of ultimate victory in regard to these various court cases.