Another Semi on the Rise

According to the Semiconductor Industry Association the industry posted the third highest sales ever in 2012, totaling $291.6 billion.    Many industry analysts are calling for a rise in 2013 of 4-5%, and many semiconductor stocks and related ETF actually started to rally in December 2012.

Rambus Inc. (NASDAQ – RMBS - $5.39) designs, develops, and licenses many patented innovations, technologies, and architectures for digital electronics products and systems.  The company’ patented products include Dual Edge Clocking that is designed to allow data to be sent on the clock pulse; FlexPhase technology, which synchronizes data output and compensates for circuit timing errors in memory systems; Module Threading that improves the throughput and power efficiency of a memory module; MicroLens, a technology that is used in light-emitting diodes (LED) edge-lit lighting applications; TruEdge, which transfers light from LEDs into a light guide; and Differential Power Analysis Countermeasures that secures electronic devices and systems from side-channel attacks.

Rambus also licenses technology solutions, including leadership and industry-standard solutions for use in digital electronics products and systems, such as XDR Memory Architecture that enables the production of dynamic random access memory (DRAM); XDR2 Memory Architecture that incorporates DRAM micro-threading for graphics intensive applications comprising gaming and digital video; FlexIO Processor Bus, a high speed chip-to-chip interface that provides the interface between the Cell BE, the RSX graphics processor, and the SouthBridge chip; The Pentelic Lighting Solutions that offer LED-based lighting products; and The CryptoFirewall Security Core, which delivers an unmatched level of protection for digital media.

Rambus continues to develop new markets and products.  It signed a patent license agreement with chip manufacturer LSI (NASDAQ - LSI- $6.76) for an undisclosed sum in which LSI agreed to use Rambus’ patented technology for its integrated circuit products.  Additionally, the company introduced a new binary pixel technology that dramatically improves the quality of photos taken from mobile devices.  The Rambus Binary Pixel technology includes image sensor and image processing architectures with single-shot high dynamic range (HDR) and improved low-light sensitivity for better videos and photos in any lighting condition.  Finally, Rambus launched Imerz, a multi-media platform enabling users to access video in a personalized experience.

RMBS reached a low of $4.07 in mid-November and has climbed to present levels on very heavy trading, an average of close to 700,000 per day.  The chart analysis is also very bullish for the short term.  With the new products and the general bounce in the industry we think the stock has legs and could get back to the 52-week high at the $7.00 level in very short order.

Have a great day!

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours. 

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