AST talks with Samsung, Et Al; settles TI's PC patent litigation

Electronic News, Feb 13, 1995

IRVINE, Calif.--Having reported some downside financial results recently (EN, Jan. 30), AST Research Inc., here, last week said it is in discussions with certain parties, including Samsung Electronics Co., regarding a potentially significant minority investment in AST and possible strategic business arrangements.

Neither AST nor Samsung, which is an IC supplier to the computer company, elaborated further on the talks, saying comments will be forthcoming when an agreement has been reached or the talks have been terminated. AST, which did not identify the other firms with which it is talking, has reported 2Q95 revenues of $640.1 million versus $677.0 million in 2Q94 and a net loss of $22.3 million versus net income of $17.9 million in the year-ago quarter.

Industry analysts have also said the firm's PC market share has been declining recently, although AST's 2Q operations included shipments of more than 398,000 units worldwide--a 29 percent increase over the just-prior 1Q95. The company also has amended its bank revolving credit, consolidation facilities and implemented other measures to improve performance.

For its part, global DRAM shipment leader Samsung has been widely reported to be mulling investment, design, R&D and other joint venture opportunities worldwide (see page 10). It recently agreed to sink $8.62 million into IC vendor Integrated Telecom Technology and may take over the whole Gaithersburg, Md. firm EN, Jan. 16).

AST made the investment talk disclosure the same day it announced agreements with Texas Instruments on cross-licensing of PC patents and settling all litigation between the two companies on such matters. Under terms of the six-year agreement, AST and TI agreed to cross-license each other's patents with periodic balancing royalties paid by AST to TI. Specific details of the agreement were not disclosed, but TI's PC patent claims related to various input/output functions while AST's patents relate to PC construction.

On the patent infringement litigation, AST had filed a lawsuit against TI in California in January, 1994 and TI counterclaimed against AST, plus filed an additional lawsuit against AST in Texas in August 1994.