Rambus Inc. Discusses Market Growth and Product Strategy at Bank of America Global Technology Conference 2025

Key Takeaways

TL;DR: Rambus is capitalizing on the DDR5 transition and AI-driven server demand, expanding its SAM w/ new companion chips, while maintaining healthy margins and minimal tariff/China exposure. The co. is aggressively investing in tech innovation to capture higher mkt share and drive future rev. growth across both product and silicon IP segments.

• Demand Environment & Market Drivers
  • Strong Q1 Growth: Rambus reported +52% YoY growth on the product side driven by tailwinds from both traditional and AI servers.
  • Increased Bandwidth & Capacity Needs: The rise in AI and traditional server demand is driven by the need for more cores, memory channels (transition from 8 to up to 16 channels per CPU), and module population, translating into higher demand for Rambus products.
  • AI Inference Tailwind: A shift from training to inference is expected to boost demand further as inference systems require standard DDR interfaces, supporting growth for Rambus’ buffer and companion chips.
• DDR5 Transition & SAM Expansion
  • DDR5 Evolution: Transitioning from DDR4 (25% mkt share) to DDR5 has been critical. Rambus moved from 25% share in DDR4 to over 40% in DDR5 by investing early in the product sub-generations.
  • SAM Growth: The evolving DDR5 environment creates additional SAM – from an initial $750M mkt for RCD chips to an extra $600M through companion chips, plus additional incremental oppt'ys in the client segment.
  • Increased Product Cadence: As DDR5 demands new chips every year (versus every other year for DDR4), Rambus expects higher recurring rev. from more frequent product launches.
• Competitive Dynamics & Market Share Expansion
  • Market Leadership: Rambus is targeting growth from its current 40% share toward 50%, leveraging early investments and tight integration within the JEDEC ecosystem.
  • Multiple Supplier Ecosystem: Maintaining at least three suppliers ensures supply chain security despite competition from players like Montage (China) and Renesas.
• Companion Chips & MRDIMM Opportunities
  • Companion Chip Rollout: Rambus introduced eight new companion chips. Initially contributing low SD rev. in H1 2025, these are expected to ramp significantly in H2 2025 and bulk up in 2026.
  • MRDIMM Chipset: Designed to double memory capacity and bandwidth, the MRDIMM product is linked to the upcoming CPU platform launch in H2 2026 after completing lengthy qualification processes.
• Client Opportunity—Clock Drivers
  • High-End PC Demand: As signal integrity challenges emerge in high-performance client systems (similar to data centers), Rambus’ clock drivers are set to capture a niche $200M mkt, w/ rubric ramping through 2026.
• Silicon IP & HBM Market
  • HBM Controller Innovation: Rambus’ silicon IP segment, currently around $120M in rev. and growing +10%-15% YoY, benefits from early partnerships for HBM3 and HBM4 controllers driven by GPU demand for high-speed memory.
  • Speed over Stack Size: Product development is tailored to offer controllers that exceed mkt requirements, w/ a focus on performance improvement rather than the high-stack number itself.
• Tariffs & China Exposure
  • Minimal Impact from Tariffs: Patent licensing ($210M rev. at 100% margins) and silicon IP are largely insulated from tariffs.
  • Low China Exposure: W/ SD exposure to China and a supply chain located in Taiwan/Korea, Rambus faces minimal direct tariff impacts, though indirect supply chain shifts are being closely monitored.
• Margin Outlook & Cost Management
  • Stable Product Gross Margins: Despite some Q1 softness due to pricing negotiations and cost changes, management expects margins to remain within the long-term target of 60%-65% by containing new product contributions within this range.
  • Disciplined Cost Savings: Continued focus on manufacturing cost improvements and disciplined pricing is anticipated to sustain margin levels as new technologies ramp.

Overall, Rambus is strategically positioning itself to capitalize on tech shifts in memory module design and growing AI/processor demand, which could drive higher rev. and mkt share as well as steady margin performance over the medium to long term.

Call Q&A

• Duksan Jang: Did you have any disclosures that we might have to make?
  • Luc Seraphin: We encourage everyone to read our documents on file w/ the SEC.
• Duksan Jang: What are you seeing in the demand environment today, esp. versus the beginning of the year?
  • Luc Seraphin: We see nice tailwinds for the server mkt, both traditional and AI servers, driving demand for our products. We had +52% growth in the first Q compared to last year.
• Duksan Jang: How should we think about the overall mkt size and competitive dynamic for your products?
  • Luc Seraphin: The mkt for RCD chips is about $750M. DDR5 adds $600M SAM w/ companion chips. High-performance client systems will add more SAM.