Electronics IP Industry – Q2 2012

Total operating costs and expenses for the six months ended June 30, 2012 were $158.4 million, which included $12.9 million of stock-based compensation expenses and $28.4 million of acquisition-related deal costs, retention bonuses and amortization expenses for business acquisitions. This is compared to total operating costs and expenses for the six months ended June 30, 2011 of $122.9 million, which included a $6.2 million gain related to the Samsung settlement, $14.3 million of stock-based compensation expenses and $8.4 million of acquisition-related deal costs, retention bonuses and amortization expenses for business acquisitions for the same period of 2011. General litigation expenses for the six months ended June 30, 2012 were $8.6 million, a decrease of $12.1 million from the same period in 2011. The change in total operating costs and expenses was primarily attributable to higher acquisition-related deal costs, retention bonuses and amortization expenses for business acquisitions, partially offset by lower general litigation expenses.

Net loss for the second quarter of 2012 was $32.2 million as compared to net loss of $27.9 million in the first quarter of 2012 and net loss of $10.6 million in the second quarter of 2011.

Diluted net loss per share for the second quarter of 2012 was $0.29 as compared to diluted net loss per share of $0.25 in the first quarter of 2012 and diluted net loss per share of $0.10 in the second quarter of 2011.

Other Financial Highlights:

Cash, cash equivalents, and marketable securities as of June 30, 2012 were $203.2 million, a decrease of approximately $29.3 million from March 31, 2012. During the second quarter of 2012, the Company used $16.7 million to pay retention bonuses related to the acquisition of CRI and $4.3 million to pay the interest expense related to the Company's convertible notes.

During the second quarter of 2012, the Company recorded an income tax provision of approximately $3.8 million. As the Company continues to maintain a full valuation allowance against its US deferred tax assets, the Company's tax provision consists of primarily foreign withholding taxes, current state taxes and foreign taxes.

About Rambus Inc.:

Rambus is one of the world's premier technology licensing companies. As a company of inventors, Rambus focuses on the development of technologies that enrich the end-user experience of electronic systems. Additional information is available at www.rambus.com.




Bar Graph Source: Google Finance





Q2 2012 REV               $56.22 million

Q2 2012 NET loss            $ 32.22 million

Q2 2012 LPS                     $ 0.29


08/17/12 CLOSING STOCK PRICE: $4.84  

     08/17/12 MKT CAP  $ 535.77 million

08/17/12  STOCK PRICE RANGE: $4.71 - $4.87 

     52 WEEK RANGE: $3.78 - $18.55



The Electronics IP G5 Results for Calendar Q2 2012

We have just completed our first look at the individual performances of each member of the Group of Five (G5) Electronics IP players for Q2 2012.

Promised thereafter was a summary of the by-now-familiar Tables of Revenues and Profits of the entire IP G5, this time of course for Q2 2012 (and the four quarters leading up to Q2 2012).

First to Table 1 and the G5 Electronics IP Revenue Sums for the last five quarters:



While the $322.93 million sum of the Q2 2012 revenue for the G5 Electronics IP Vendors exceeded that of Q1 2012, it still came in short of the Q4 2011 sum of $333.50 million. ARM, MIPS, and Mosys improved in the most recent quarter compared to Q1 2012, but Q2 revenue shortfalls from CEVA and Rambus were too large to overcome those improvements, such that Q2 2012 G5 total revenue was still less than that of Q4 2011.  Still, Q2 2012 G5 revenue increased both sequentially over Q1 2012 (+6.53%) and year-over-year vs. Q2 2011 (+10.40%).

It is interesting to compare revenue from the G5 IP vendors reported here, to the revenue category for “SEMICONDUCTOR INTELLECTUAL PROPERTY” collected by the EDAC MSS. For this comparison we must use our Q1 data, as the latest available-to-non-members EDAC data are always one quarter in arrears.


According to the latest available EDAC MSS report issued to the public on July 11, 2012, Semiconductor Intellectual Property (SIP) revenue reported by Consortium members totaled $391.3 million in Q1 2012, a 5.4% increase compared to Q1 2011. From our Tab1e 1 above we note that the G5 alone created $303.13 million in Q1 2012, and looking back to our Q1 2011 data in the May 25, 2012 issue of the EDA G5 IP Commentary we see $286.67 million, which represents a  growth of $303.13/286.67 = 1.0574 or 5.74%. Of course, non-members do not know the sources of the EDAC data.

Turning now to Table 2 the net income for the G5 for Q2 2012 totals $43,810,000 on $322,930,000 in revenue, yielding an after tax profitability of 13.57% for the sum of 5 entities. Q2 2011 last year yielded 10.79%.

The quarter by quarter ROS% varies wildly by quarter, but the 4 QTR total was 13.72% for these five IP vendors. A similar four quarter average for four MCAD entities was 14.17% ROS; for four EDA entities 10.12% ROS.

The same calculation for ARM alone yields 25.3% ROS.


Notice that Table 1 columns far above calculate the percentage of one quarter over the other, as labeled, whereas in Table 2 just above, the relevant columns provide the numerical dollar differences in earnings between two different quarters as labeled.

On August 3, 2012 the Washington DC-based Semiconductor Industry Association (SIA), representing US leadership in semiconductor manufacturing and design, announced that worldwide sales of semiconductors reached $24.38 billion for the month of June 2012, a slight decrease of 0.1% from the prior month when sales were $24.40 billion. Sales from June 2012 were 2% lower than the June 2011 total of $24.89 billion, but the year-over-year decrease was smaller than it has been since October 2011. All monthly sales numbers represent a three-month moving average.  

“The semiconductor industry continues to navigate the turbulent global economy better than most sectors, but macroeconomic uncertainties are limiting overall recovery and growth. The Japan and Asia Pacific sequential increases are encouraging signs, but are tempered by continued weakness in Europe and the Americas,” said Brian Toohey, president & CEO, Semiconductor Industry Association. “Congress can help ease economic uncertainty by enacting effective and dependable policies that promote American competitiveness and spur economic growth. Policymakers should chart a path forward during the August congressional recess and return to Washington, D.C. next month ready to act.” 

Regionally, semiconductor sales increased on a sequential monthly basis in Japan (2%) and Asia Pacific (0.6%) but declined in Europe (-0.7%) and the Americas (-3.6%). Compared to June 2011, sales in June 2012 increased in Japan (3.7%) and Asia Pacific (1.0%) but fell steeply in the Americas (-8.1%) and Europe (-12.1%). Japan and Asia Pacific attained month-over-month and year-over-year growth simultaneously for the first time since September 2010. 

About the SIA

The Semiconductor Industry Association, SIA, is the voice of the U.S. semiconductor industry, one of America's top export industries and a bellwether measurement of the U.S. economy. Semiconductor innovations form the foundation for America's $1.1 trillion dollar technology industry affecting a U.S. workforce of nearly 6 million. Founded in 1977 by five microelectronics pioneers, SIA unites over 60 companies that account for 80 percent of the semiconductor production of this country. Through this coalition SIA seeks to strengthen U.S. leadership of semiconductor design and manufacturing by working with Congress, the Administration and other key industry groups. The SIA works to encourage policies and regulations that fuel innovation, propel business and drive international competition in order to maintain a thriving semiconductor industry in the United States. Learn more at www.sia-online.org

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