Rambus (RMBS) Wells Fargo 8th Annual TMT Summit Conference summary

Key growth drivers and market trends

• Data center growth, especially AI and traditional servers, is driving demand for higher bandwidth and capacity, increasing the need for more memory channels and modules per server.

• Transition from DDR4 to DDR5 is expanding content per module, with new chips like power management, SPD hubs, and temperature sensors moving onto the DIMM.

• Market share in RCD chips has grown to over 30% and is expected to rise further with DDR5 adoption.

• MRDIMM solutions, launching in 2026, will further increase content and revenue opportunities per module.

• AI server adoption is accelerating DDR5 uptake, acting as a catalyst for high-end memory solutions.

Product and revenue expansion

• RCD chip market size is about $750 million, with companion chips (SPD hub, temperature sensor, PMIC) adding another $600 million, nearly doubling the addressable market.

• New companion chips are in qualification and will ramp up in 2025 and beyond.

• MRDIMM modules will introduce additional chips and could quadruple content value per module by 2026.

• High-end client PC market for clock drivers is emerging, with shipments expected in the second half of next year, representing a $200 million opportunity.

• Patent licensing and silicon IP businesses remain stable, with silicon IP expected to grow 10-15% annually.

Financial outlook and operational strategy

• Gross margins are expected to remain in the 60%-65% range as new products are introduced.

• Operating margins are projected at 40%-45%, with continued investment in R&D at 23%-25% of revenue.

• DDR4 inventory headwinds have subsided, with DDR5 now dominating shipments and lean inventory levels.

• Cash generation remains strong, with over $200 million from operations last year.

• The company is agnostic to processor architecture (x86, ARM) and well-positioned for future memory technology transitions.