Satish Rishi - Sr. VP and CFO Harold Hughes - President and CEO Thomas Lavelle - Sr. VP and General Counsel Sharon Holt - Sr. VP, Licensing and Marketing

Jeffrey Schreiner - Capstone Investments Michael D. Cohen - Pacific American Securities, LLC Hamad Khorsand - BWS Financial

Good day, everyone and welcome to this Rambus Quarterly Earnings Conference Call. As a reminder, today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Satish Rishi. Please go ahead, sir. Satish Rishi - Senior Vice President and Chief Financial Officer: Thank you, operator and welcome to the Rambus third quarter 2008 conference call. I am Satish Rishi, Chief Financial Officer and on the call today are Harold Hughes, our President and CEO, Tom Lavelle, Senior VP and General Counsel, and Sharon Holt, Senior VP of Licensing, and Marketing for the Q&A. The press release for the results that will be discussed here today have been filed... has been filed with the SEC on Form 8-K. If you want a copy of the release, please visit our website at www.rambus.com on the Investor Relations page under Financial Releases. A replay of this conference call will be available for the next week at 888-203-1112. You can hear the replay by dialing the toll free number and then entering ID number 5134540 when you hear the prompt. In addition, we are simultaneously webcasting this call and a replay can be accessed on our website beginning today at 5 PM ET. Before I begin, I need to advise you that the discussion today will contain forward-looking statements regarding our financial prospects, pending litigation and demand for technologies among other things. These statements are subject to risks and uncertainties which are more fully described in the documents we filed with the SEC including our 8-Ks, 10-Qs, and 10-Ks. These forward-looking statements may differ materially from our actual results Now, I will turn the call over to Harold. Harold? Harold Hughes - President and Chief Executive Officer: Thanks, Satish, and good afternoon, everyone. For the third quarter, we achieved revenue of $29.4 million which was in the midpoint of our guidance. While this result was down on a sequential basis, we'll be guiding up for the current quarter. Satish will give you the details during his part of the call. We have talked about strategic need to ensure the company had a solid financial foundation on which to build our future success. I want to reiterate that we remain steadfast in our commitment to investing in breakthrough technologies as well as our continues efforts to protect before they compensated for our IP. Last quarter we said we were evaluating a number of alternatives to bring down our cost structure including reduction in staff. On August 24... excuse me, on August 14, we announced a restructuring that included the elimination of 90 positions at Rambus. It was a difficult decision and one we did not make lightly. As a result, we will reduce our cost structure by about $17 million annually. Our full-time headcount after the restructuring is around 340 employees, two-thirds of whom are engineers and scientist who continue to innovate and help our licensees implement our breakthrough technologies in their products. At the end of the quarter, our portfolio had grown to 734 issued patents with another 507 pending. Our commitment to innovation and technology leadership is unwavering. Our leadership and the performance... and the memory performance... high performance memory area is renowned. Solution like the XDR memory architecture and innovations foundational to DDR and GDR memories are testament to the impact of our technologies. But our contributions are increasingly critical in the mobile market as well. Low power DDR and synchronous flash are made possible thanks to patented Rambus innovations. During the quarter, we continued our commitment to protect and to be fully compensated for our patented innovations. We do this both to protect the investments of our shareholders and as a matter of fairness to our paying licensees. We recognize this is a long and at times arduous process. Nevertheless, we continue to make real progress. Since the last call the CADC denied the FTC's request for an en banc rehearing and the FTC has now issued an order removing its dictates on our ability to collect royalties at the rates we had negotiated with our licensees. Also, supreme court denied Samsung's request for [inaudible] which puts to rest the issues raised in Virginia. We put on our case before Judge Whyte regarding Samsung's contract claims, and while we don't have the results we are pleased with the strength and conduct of our case. We believe strongly we are pursuing the right course with the focus on the long term and we appreciate the continued patience and support of our shareholders. With that, I will turn the call over to Tom to get more details on our litigation activities. Thomas Lavelle - Senior Vice President and General Counsel: Thanks, Harold, and a good afternoon everybody. Let me start with the coordinated cases. In the Samsung matter, a bench trial in front of Judge Whyte was held in the latter part of September which addressed various Samsung specific issues including certain contractual issues raised by Samsung. That portion of the case has been completed. In addition, on Tuesday of this week, Judge Whyte held a hearing regarding Samsung's allegations of spoliation. We are now awaiting Judge Whyte's decision on these issues. You will recall that Samsung had earlier opted out of the conduct phase with the other manufacturers so that it could address its specific issues in a separate case. It has now had that opportunity. Nevertheless, Samsung agreed to be bound by the factual record of the earlier conduct trial with Hynix, Micron and Nanya. Continuing on with the coordinated cases, Judge Whyte has not yet ruled on the equitable relief we requested regarding the Hynix's ongoing infringement of our patents. The hearing for equitable relief was held in June. Looking ahead, the patents infringement trial for claims related to SDR, DDR, DDR2 and other memories with regards to Hynix, Micron, Nanya and Samsung is slated for January 2009 before Judge Whyte. Hynix has already been found to infringe our patents with their SDR and DDR DRAM products and of course those patents were found to be not invalid. Returning to Samsung, the US Supreme Court has denied Samsung's request for certiorari to review the case stemming from the Eastern District of Virginia. At long last, this puts an end to the issues raised in Virginia and we're quite pleased with this outcome. Moving to the FTC, last week we've received an order from the FTC authorizing us to receive the license fees which were above the rates in the FTC's now vacated order. These moneys had been held in abeyance. The actual receipt of these of amounts will be pursuant to the contractual obligations set forth with our individual customers. This order does not preclude the FTC from filing a petition for certiorari with the Supreme Court. The deadline to do so is in late November. It also could be extended. We don't know what's going to happen in that regard. But it does give us the ability to receive those funds held in abeyance pending our now successful appeal of the FTC's order. Satish will walk through the financials surrounding this particular matter in just a few minutes. Moving to the Micron case in Delaware. A hearing was held in Judge Robinson's court on September 19 and we are awaiting her decision on the allegations of spoliation brought by Micron. And a quick reminder that preparations for trial of our price fixing case before Judge Kramer in the District Court in San Francisco are proceeding. That trial is scheduled to begin on March 16, 2009. With that, I'll turn the call back over to Satish to review the financials. Satish? Satish Rishi - Senior Vice President and Chief Financial Officer: Thanks, Tom. As reflected in our press release today, we finished the third quarter with revenues of $29.4 million, down 18% from the previous quarter and down 29% from the year ago quarter. The decrease in revenue from the previous quarter was primarily driven by lower patent royalty revenue from Elpida. The decrease in revenue from a year ago was due to decrease in patent royalties from Qimonda and Elpida and some lower contract revenue. As Tom mentioned, during the quarter the FTC order was vacated and as of last week the FTC issued a final disposition order. Since Q2 of 2007 when the initial remedy order... since the initial remedy order we were not allowed to collect royalties in excess of the FTC's stipulated rates. Most of our customers withheld the excess amounts and one of them paid us the full amount but identified the amount they believed was in excess. During the quarter we recognized a portion that we had received, that is the $0.9 million as revenue, and we will recognize the balance over the next one or two quarters as and when we receive the withheld cash from the customers. Operating expenses for the third quarter were $60 million, up 14% from the previous quarter and up 3% from the third quarter of last year. These operating expenses include approximately $9 million of stock based compensation, $4 million in one-time restructuring, $2.2 million in impairment charges that we booked this quarter and about $400,000 in expenses related to price stock option restatement issues. To provide a better comparison period-over-period, I am excluding expenses related to these one-time events from my discussion. Excluding stock based compensation, restructuring, impairment and restatement expenses, adjusted operating expenses in this quarter at $44.4 million were up 7% from the previous quarter and down 2% from the quarter a year ago. The increase from the previous quarter was primarily driven due to higher litigation expenses partially offset by lower engineering costs. The decrease from the quarter a year ago was primarily due to lower SG&A and engineering costs offset in part by higher litigation expenses. Adjusted engineering expenses were down 19% from the prior quarter primarily due to a lower cost of contractual expenses, lower compensation and lower allocations. SG&A excluding litigation was up 3% and litigation was up by $6.6 million or 73% from the previous quarter due to higher case related expenses. From the quarter a year ago, adjusted engineering expenses were lower by 11%, primarily due to lower cost of contract related expenses, compensation and lower amortization costs. SG&A excluding litigation was lower by 19% due to lower consulting, accounting and marketing related costs and litigation was higher by 34%. Our adjusted operating loss for the quarter was $15 million or 162% lower from the previous quarter and 344% lower than the third quarter of 2007. Overall cash, defined as cash, cash equivalents and marketable securities, excluding restricted cash remain strong at $379 million, a decrease of approximately $15 million from the second quarter of 2008 and down $62 million from the beginning of the year. During the quarter we spent about $10 million to buy 600,000 shares at an average price of approximately $15.7. The decrease in cash from the beginning of the year was due to a repurchase of 2 million shares during the year totaling $35 million as well as the payments towards the settlement of a class action lawsuit in Q2 of this year in the net amount of $13.3 million. Now let me give you some thoughts regarding the fourth quarter. This guidance reflects our reasonable estimate and our actual results could differ materially from what I'm about to review. We expect our third quarter revenue to be between $29 million and $33 million. This estimate includes some but not the entire amount of an abeyance related to the FTC order. We expect operating expenses, excluding stock based compensation, to be between $46 million and $51 million which includes an estimated litigation expenses of $16 million to $20 million. As we prepare for the two key upcoming trials in January and March of next year, we are being committed to protecting intellectual property. In the near term, we expect our litigation cost to continue to be significant and dynamic. That concludes our prepared remarks. Operator, would you please open the call for questions? Question and Answer

[Operator Instructions] And we'll go first to Jeff Schreiner with Capstone Investments. Jeffrey Schreiner - Capstone Investments: Hello, everybody. How are you doing today? Thanks for taking the time to take my questions. I am sorry I was not able to listen in on all of the prepared remarks but one of the first questions I want to ask is what potential impact could this absence that Judge Whyte is taking have on the timing of the January case and has the company been informed as to the nature of this absence? Thomas Lavelle - Senior Vice President and General Counsel: This is Tom, Jeff. I'm not sure exactly what you are referring to. We had a hearing in front of Judge Whyte this week and I am not sure what you are referring to. We intend to have a trial in January at this point. And if you are telling me something I haven't heard I will find out soon enough. Jeffrey Schreiner - Capstone Investments: All I know is that on his schedule it now says that he is absent from today till the November 28 and will not be presiding any court and has transferred his case load off to other judges for that time. Thomas Lavelle - Senior Vice President and General Counsel: That's news to me. Jeffrey Schreiner - Capstone Investments: Okay. Well, moving on, the comments or any updates related to the PTO I don't know if one of those in the highlights and what might be some potential dates to expect maybe some additional commentary from the PTO? Thomas Lavelle - Senior Vice President and General Counsel: Well, as you probably know the US PTO procedures generally take some significant period of time. We have been working closely with the patent examiners on the patents that are… that have been called into question and have spent some time with the patent examiners explaining precisely why we believe the patents are valid, why the [inaudible] found them valid, why the juries have found them valid and we hope and expect that with the appropriate review that the patent office will reach the same conclusion that other people have. Jeffrey Schreiner - Capstone Investments: Okay. Thomas Lavelle - Senior Vice President and General Counsel: I don't have a specific date when I think that's going to be final. Jeffrey Schreiner - Capstone Investments: Okay. To Sharon, have you seen any real change in tone and negotiations since you kind of gotten since the announcement out and around to potential and possibly future customers? Sharon Holt - Senior Vice President, Licensing and Marketing: I assume, are you referring to the announcements about the latest actions with the FTC or to something else? Jeffrey Schreiner - Capstone Investments: Yes, and related to the maximum allowable royalty rates that were removed by the FTC. Sharon Holt - Senior Vice President, Licensing and Marketing: So I cannot comment, obviously, about ongoing negotiations, but I will say a couple of things. First of all, of course, as we mentioned in our prepared remarks, we certainly had to... have dialogue with our existing licensees about the order being vacated and a next step. So that has been ongoing. With respect to potential licensees, you can certainly count on the fact that we are using the latest news with respect to the FTC to our advantage in our ongoing dialogue with potential licensees. But, I can't give you any more specifics than that. Jeffrey Schreiner - Capstone Investments: Okay. And then one final question and I will get off into the queue. Appreciate your time. Tom, going to back to be real quick, is there any legal basis when you look at the basis of law that requires the Hynix trial to certified before you were to begin you patent trial in January? Thomas Lavelle - Senior Vice President and General Counsel: No, there's not. Sharon Holt - Senior Vice President, Licensing and Marketing: Okay. Thank you very much, everyone. I appreciate your time. Thomas Lavelle - Senior Vice President and General Counsel: Thanks, Jeff. Sharon Holt - Senior Vice President, Licensing and Marketing: Thank you.

And we will go next to Michael Cohen with Pacific American Securities. Michael D. Cohen - Pacific American Securities, LLC: Hi. Thank you for taking my call… no, my questions. My first question is likely for Tom. You recently filed the covenant not to sue on the wear patents report and suit against the manufacturers and NVIDIA. I was wondering if you could share some of the reasons why you filed that covenant not to sue. Thomas Lavelle - Senior Vice President and General Counsel: Well, as you know we made a decision not to assert them after they had actually been filed. There are a number of reasons for that. Most of which I am not going to be able to share. But keep in mind that we had a limited number of claims we were allowed to pursue in the case and we decided to not pursue those specific ones and keep the other ones at suit. As you also probably know, we have many, many post Farmwald/Horowitz patents that still are there to be asserted at some point in the future if we don't succeed in getting people who infringe to take licenses to those patents. Michael D. Cohen - Pacific American Securities, LLC: Where, you limited in number with regard to it's asserting against NVIDIA or you just referring to the manufacturers at this point? Thomas Lavelle - Senior Vice President and General Counsel: We are limited in the numbers that we're going to have in the NVIDIA case as well. Michael D. Cohen - Pacific American Securities, LLC: Okay. And… Thomas Lavelle - Senior Vice President and General Counsel: Michael, keep in mind that we asserted many post Farmwald/Horowitz patents against NVIDIA. Michael D. Cohen - Pacific American Securities, LLC: Okay. And my next question is regarding the Hynix case where you know you have won Phase I, you won Phase II, you won Phase III and we are winding down to the end. I was just wondering, what rulings in addition to final judgment and then supplemental damages and equitable relief. What additional rule and further still out there? Thomas Lavelle - Senior Vice President and General Counsel: There are some other motions that have been made to basically non-suit the case to effectively overturn the jury verdict. Those are also in front of Judge Whyte and those will, at some point, be ruled on by Judge Whyte. We don't know when. Michael D. Cohen - Pacific American Securities, LLC: Okay. And my next question. Okay, my next question is likely for either Harold or Sharon. It's been sometime since we heard about the Intel memory and I am not understanding and we really haven't heard any update since the press release. I wonder if you could share any thoughts on what's going on there? Harold Hughes - President and Chief Executive Officer: We believe that we have an excellent solution for [inaudible] architecture and we worked very closely and meet frequently with Intel. We go over the reasons we believe that. As you know, part of the requirement that is only rational and reasonable for Intel to require is the presence of adequate supply. In that regard we meet quite frequently with the DRAM manufacturers and made progress there. All those things are ongoing. I can't give you much information beyond that other than that relationship remains a very good one. Michael D. Cohen - Pacific American Securities, LLC: Okay. I appreciate that. And going back to Tom, we haven't heard much about the European litigation front. I was wondering if you could give us kind of a high level update of anything significant going on there. Thomas Lavelle - Senior Vice President and General Counsel: Well, there is really nothing to update that we have at the present time. There are always rumors bandied about and I won't pass those on. I will let the rumor mill do that for me and when there is anything announce different than we've already said in the past. Michael D. Cohen - Pacific American Securities, LLC: Okay. And my last question is have you contemplated going back to the international trade commission at all? It seems like a venue that now that the circumstances have changed with the FTC being overturned. Maybe that's something you might want to consider? Thomas Lavelle - Senior Vice President and General Counsel: As you might imagine, we certainly look at all options and avenues to use to enforce our intellectual property rights and if and when we make such a decision, we will let everybody know. Michael D. Cohen - Pacific American Securities, LLC: Okay. Thank you very much. I appreciate it.

[Operator Instructions] We will go next to Hamad Khorsand with BWS Financial Hamad Khorsand - BWS Financial: Good afternoon. Just one question. Given that you are receiving patents on one... receiving royalties on consumer electronics, would sudden slowdown in economy that we are seeing now have a material impact as to the royalty rate you receive or the royalty amounts you receive? Sharon Holt - Senior Vice President, Licensing and Marketing: Hi, Hamad. This is Sharon. I will take that question. Certainly we could be affected by that. Many of our existing contracts have running royalties as you know. So the amount that we get paid is very directly tied to the volume of our customer shipments and you are correct that a number of our licensees, particularly in Japan are very heavily in the consumer electronics market. So far, we have, I think been able to do a good job forecasting what we expect those revenues to look like. But as you can imagine we are watching the markets and the health of our customer's business very closely because it certainly could have an effect on us as well. Hamad Khorsand - BWS Financial: Okay. And then, one more question, is there a product update that you can provide us as to what to expect CES is only about two months away now as to where XDR would be on the consumer level? Sharon Holt - Senior Vice President, Licensing and Marketing: I certainly don't want to make comments about what some of our customers might or might not be presenting at CES. We will certainly announce any new developments publicly as we can. Hamad Khorsand - BWS Financial: Okay. Thank you. Sharon Holt - Senior Vice President, Licensing and Marketing: Thank you.

And that does conclude our question-and-answer session. I would now like to turn the call back over to management for any additional or closing remarks. Harold Hughes - President and Chief Executive Officer: Again, thank you very much to our shareholders. We recognize this is an awfully long process. We are committed to see it through and we believe strongly and the fact we believe we will win and the shareholders will benefit from that. Again, thank you very much. See you next quarter.

And that does conclude today's call. We do appreciate your participation. You may disconnect at this time. .