Update: Rambus Jumps 8% on Licensing Deal With NEC

Updated from 12:06 p.m. EDT

Shares of Rambus(RMBS Quote - Cramer on RMBS - Stock Picks) jumped Wednesday after the memory chip designer said it had reached a licensing agreement with NEC (NIPNY Quote - Cramer on NIPNY - Stock Picks) of Japan, the world's second-largest chipmaker.

NEC is the largest chipmaker to sign a licensing agreement with Rambus, which is embroiled in lawsuits over licensing royalties. It is the fourth such deal for Rambus, which designs but does not manufacture memory chips.

Rambus finished up $6.50, or 8%, at $83.31 after rising as high as $85.50 during intraday trading. NEC's American depositary receipts finished up $1.88, or 1%, at $130.88.

The Santa Clara, Calif.-based company has licensed more than 100 patents to around 30 semiconductor companies. NEC's rivals, Toshiba and Hitachi(HIT Quote - Cramer on HIT - Stock Picks), signed similar patent agreements in June.

Earlier this year, Rambus sued Hitachi, arguing that it owed Rambus royalties on SDRAM and DDR memory, each of which competes with Rambus' proprietary RDRAM, an acronym for Rambus dynamic random access memory. Hitachi settled that suits by agreeing to pay Rambus the royalties. Rambus also has a case pending against Infineon Technologies (IFX Quote - Cramer on IFX - Stock Picks).

But two other chip makers, Micron Technology(MU Quote - Cramer on MU - Stock Picks) and Hyundai Electronics Industries of South Korea, have sued Rambus, rejecting the company's claims to patent royalties and instead accusing the company of violating antitrust laws. Rambus filed a counterlawsuit against those two companies in Europe on Tuesday.

The NEC agreement includes development of a new line of direct RDRAM products as part of a larger strategic alliance and a broader licensing agreement between the two companies. NEC has been developing, manufacturing and marketing RDRAMs since 1991.

"We expect to see this success continue into other areas such as the PC, workstation and server markets, and the agreement signed with Rambus is another step towards that goal," said Kanji Sugihara, a top executive for NEC Electron Devices, the semiconductor arm of NEC.

The deal includes undisclosed royalties and licensing fees, and NEC signed a patent agreement covering "fundamental aspects of high-speed memory interfaces invented by Rambus," the companies said in a statement.