Tessera Solid In & Out of Court

Highlights include Tessera Technologies, Inc. (TSRA - Analyst Report), Infineon Technologies AG (IFX) and Micron Technology, Inc. (MU - Snapshot Report).

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Tessera's advanced packaging technologies have industry-wide applications. The firm has won 5 major lawsuits and now receives royalties from all of the big four in the DRAM market.

Royalty growth has been spectacular, growing from $8.8 million in the 1st quarter of 2004 to $57.6 million in the third quarter of 2008. The royalty payments are expected to be a steady growing stream and the long-term revenue driver.

Samsung and Hynix (both clients) are the 2 largest DRAM manufacturers and together control almost 50% of the DRAM market. The company has recently settled two separate litigation actions against Infineon (IFX) and Micron Technology (MU - Snapshot Report), the number three and four DRAM manufacturers, with a combined 30% market share.

Four more litigation events hold promise for one time payments and ongoing revenue.

Litigation Review and Update Per Management:

Amkor Arbitration
On Jan. 14, 2009, the International Chamber of Commerce's International Court of Arbitration issued to Tessera an award of $64.1 million, due by Feb. 15, 2009, for Amkor's material breach of its license agreement. This amount covers the time period March 2, 2002 through Dec. 1, 2008 and includes pre-judgment interest.

Investigation No. 337-TA-630 (DRAM ITC Action)
On Jan. 6, 2009, the International Trade Commission (ITC) Administrative Law Judge (ALJ), citing the Court's current caseload and responsibilities in other investigations, extended the deadline for issuing the Initial Determination in the action from Jan. 14, 2009 to March 6, 2009, and the date for issuance of the Final Determination (the target completion date) in the action from April 14, 2009 to July 6, 2009.

Investigation No. 337-TA-605 (Wireless ITC Action)
On Jan. 30, 2009, the ITC granted Tessera's Petition for Review and will review the Initial Determination by the ALJ. The ITC's Final Determination remains scheduled to be issued by April 3, 2009.

Investigation No. 337-TA-649 (Subcon ITC Action)
On Feb. 2, 2009, Tessera requested that the ITC pause the proceedings until the ITC has made a Final Determination in the Wireless ITC Action. The chief reason for Tessera's request is that there are disputes common to both the Subcon ITC Action and the Wireless ITC Action now under review by the full ITC, so that it would be a waste of judicial resources, as well as the parties' resources, to proceed to trial before the ALJ in the Subcon ITC Action until both the Court and the parties have the benefit of the ITC's Final Determination in the Wireless ITC action.

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