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Rambus, Intel Sign New Patent Agreement

Two Silicon Valley-based companies in the semi-conductor sector say they like working with each other so much that they're pledging to swap patent information for the next five years.

Santa Clara, Calif.-based chip making giant Intel and Los Altos, Calif.-based Rambus Monday signed the comprehensive patent cross-license agreement that replaces a prior agreement between the companies.

Specific details of the agreement are hush-hush at this point, but executives say the deal covers complete patent coverage to Intel for all patents while giving Rambus license coverage necessary for Rambus' high-speed interface businesses.

"We have had a long and mutually beneficial relationship with Intel," says Rambus CEO Geoff Tate. "As an R&D hub for high-speed interfaces, we believe the RDRAM standard is the best solution for the majority of the market and our top priority. But as evidenced by this license with Intel, we are pleased to license our other memory, communications and backplane inventions as well."

Rambus' technology and intellectual property are licensed to leading semiconductor suppliers, including DRAM, controller and microprocessor manufacturers, ASIC developers, and foundries for use in computer, consumer and networking systems such as personal computers, workstations, servers, game consoles, set top boxes, digital HDTVs, high-speed switches and routers.

Investors certainly liked the news. Shares of Rambus swelled past 14 percent after the company announced the deal with the world's leading chipmaker.

"We also look forward to continued cooperation with Rambus in the further development of RDRAM-compatible chipsets and communications chips as well as the company's support of InfiniBand and future initiatives," says Intel president and CEO Craig Barrett.

Intel says it will buy back as many as 300 million additional shares of its common stock, worth about $7.8 billion. The repurchase program is a popular move of publicly traded companies after the Securities Exchange Commission eased some stock rules and the market's weeklong hiatus.