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Known for its technological inventions, Rambus Inc. (RMBS - Snapshot Report) recently came out with a technology-turned-product, its first ever light emitting diode (LED) bulbs. The bulbs will feature Rambus’ latest MicroLens optical technology, which will help generate consistent lighting and control spherical distribution of light. The company asserts that the bulbs are economical (due to lower production cost), energy efficient and long lasting.

Along with the bulb invention, Rambus set up a business alliance with the Elite Group for the promotion and sale of its bulbs across North America.

LED is a semiconductor light source used as indicator lamps in many technological devices and are increasingly being used for general lighting products. LEDs are energy efficient, long lasting, space saving but relatively more expensive than incandescent light sources.

However, the technology continues to evolve, with significant advancements in brightness of the LED devices that would make them all the more suitable for the lighting revolution. Hence, Rambus’ entry into this growing LED lighting market could prove extremely beneficial going forward.

During its third quarter 2012 earnings call, the company mentioned enormous growth prospects in the LED market. Rambus also stated that it will be changing its business strategy within this division to focus less on display technology and more on general lighting to capitalize on the imminent opportunity in LED.

In April 2012, Rambus licensed its advanced lighting technologies to Fern Howard for an undisclosed sum. Earlier, the company signed a licensing agreement with GE Lighting, a unit of General Electric Company’s (GE - Analyst Report) Appliances & Lighting business, for the enhancement of LED products.

With the rising popularity of energy-efficient lighting, the in-vogue LED products are finding place in the latest architectural, retail, commercial and residential lighting fixtures. We find Rambus in a favorable position to capitalize on this opportunity.

However, back-to-back blows from its legal battles with customers such as Micron Technology Inc. (MU - Analyst Report), LSI Corp. and STMicroelectronics (STM - Snapshot Report) and oversupply in the semiconductor market are concerns.

Currently, Rambus has a Zacks Rank #3 (Hold).

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