Tessera, Infineon/Qimonda settle patent dispute

August 2, 2006 – Tessera Inc. has tied up the other end of a longstanding lawsuit over use of its chip packaging technology, agreeing to a six-year licensing agreement with Infineon and former memory unit Qimonda.

Under terms of the deal, Infineon and Qimonda will pay a one-time license fee of $10 million and $40 million, respectively, in 4Q06, plus royalties over a six-year period based on the volume of products sold — expected to amount to $20-$30 million combined in fiscal 2007. Qimonda is expected to pay a predominant portion of those royalties, the companies stated.

Tessera filed suit against Infineon and Micron Technology Inc. in March 2005 in a US District Court in Texas, alleging infringement of its packaging technology for memory and other semiconductor devices. Just days ago, Micron agreed to pay $30 million for a royalty-bearing license to Tessera’s “compliant chip” packaging technology, to be received in 3Q06. Tessera said that deal would pump roughly an extra $20 million to its full-year revenue guidance, although the company also hiked projections for operating expenses, mostly due to litigation costs amounting to $25-$26 million.

Earlier this year Tessera filed lawsuits against backend companies ASE, ChipMOS, Siliconware Precision Industries (SPIL), and STATS ChipPAC, based on its belief that its licenses with several top global IC manufacturers represented only about a third all chips using its packaging technology in 2005.


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