Saifun Makes Up with AMD, Fujitsu

Saifun Semiconductors Wednesday agreed to bury the legal hatchet with rivals AMD and Fujitsu, pledging to instead cross-license patents and technology and collaborate in the development of non-volatile memory with the firms.

As part of the collaboration, AMD and Fujitsu will also take an equity stake
in Israeli-based Saifun.

The lawsuit, filed by Saifun In February of 2002, alleged that the company
disclosed “revolutionary” memory chip technology to AMD and Fujitsu after
the companies agreed to keep the information secret.

According to the suit, both companies used the technology to develop their
own memory chip products. Saifun had sought an order blocking the companies
from infringing its patent.

According to Dr. Bertrand Cambou, group vice president of AMD’s Memory
Group, AMD and Fujitsu will now be able to not only license Saifun’s NROM
technology, but also leverage its engineering resources.

“The recognition of our technology and intellectual property by these
industry leaders validates Saifun as a leader in non-volatile memory
technology,” stated Dr. Boaz Eitan, president and CEO of Saifun.

Citing an agreement with Saifun, a spokesman for AMD refused to comment on
the terms of the settlement, while neither Fujitsu nor Saifun could be
reached early this morning.

Israel’s Ha’aretz newspaper, however, reports that under the terms of the
agreement signed for a ten-year period, the two companies will pay Saifun
$25 million for the license to use its Flash Memory.

In addition, AMD will invest $15 million and Fujitsu $10 million, for which
the companies will recieve a 4.5 percent share in Saifun, the newspaper

According to Jim Cantore, memory analyst for iSuppli, the settlement was a
smart move for the companies.

“Any time the companies can come to a reasonable agreement, it’s better than
following some long drawn-out litigation,” said Cantore. “All in all it’s a
plus for the industry because ultimately it will end up giving users of
multi-level high-density flash more choices.”

The move also puts AMD and Fujitsu in a stronger position to battle market
leader Intel.

“It’s a very bold but necessary move by both AMD and Fujitsu to counter the
multilevel cell technology that Intel pioneered with its StrataFlash,”
said Cantore. ‘As this technology moves ahead, and they develop more
advanced processes using this new technology, it’s probably awfully good
that they stay close to the original creator of the NROM Technology.”

According to the latest research from iSuppli, the flash market is in the
middle of a recovery, meaning that it is likely to finish below last years
number of $7.6 billion.

“We have come through the worst of this particular flash memory downturn,
where revenue has bottomed in the first quarter of this year,” said Jim
Cantore, memory analyst for iSuppli.

Looking ahead to 2003 the analyst expects to see some tightening in capacity
and continued growth in the Flash Market in excess of 14 percent.

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