Back to top

Analyst Blog

Technology licensing company Rambus Inc. (RMBS - Snapshot Report) is defocusing its Display business. Rambus reportedly shifted all its Display patent assets to a subsidiary of Acacia Research Corporation (ACTG - Snapshot Report). Display patents were offered under the Lighting and Display Technologies segment. Financial terms of the deal were not divulged.

Rambus stepped into the Lighting and Display Technology business in 2009, which was a vertical shift influenced by its traditional (semiconductor) licensing business. Notably, Rambus strengthened its new business area with the acquisition of a portion of Uni-Pixel's intellectual property portfolio in early 2010. The portfolio comprised dynamic backlighting based on Time Multiplexed Optical Shutter ('TMOS') display technology. The TMOS display technology can be applied to modern LCD display panels to create more efficient and cost-effective devices.

Over the years, Rambus felt the importance of lighting technologies in human lives and decided to focus more on inventing newer lighting technologies.

During the third quarter of 2012, Rambus announced plans to change its business strategy within this division to focus less on display technology and more on general lightening to capitalize on the imminent opportunity in LED (light emitting diode).

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.

Rambus’ LED focus gained momentum with a patent licensing deal with General Electric Company’s (GE - Analyst Report) Lighting unit in Jun 2010. Under the terms of the deal, Rambus licensed its patented inventions to help GE manufacture a comprehensive suite of LED solutions.

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. To strengthen its position in the Lighting segment and ensure patent protection, Rambus went beyond its traditional licensing model to develop its first ever LED bulbs in Jan 2013. 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.

The decision to shed off the Display technologies segment is going to prove beneficial for Rambus and we believe that the company has the potential to capitalize on the budding LED opportunities.

Though back-to-back blows from its legal battles with customers such as Micron Technology Inc. (MU - Analyst Report), LSI Corp. (LSI) and STMicroelectronics (STM) are concerns, we are positive on the news of an expected growth in the global semiconductor market in 2013.

Currently, Rambus has a Zacks Rank #1 (Strong Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.71 +4.50%
GREEN PLAIN… GPRE 44.64 +1.89%
BANCO DO BR… BDORY 14.21 +1.86%
WEATHERFORD… WFT 23.31 +1.64%
AROTECH COR… ARTX 3.73 +1.50%