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

Jeffrey Schreiner - Capstone Investments Michael Cohen - NBC Financials

Good day, everyone and welcome to the Rambus Quarterly Earnings Conference Call. 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.

Thank you, operator and welcome to the Rambus Fourth Quarter and Full Year 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. The press release for the results that will be discussed here today have been filed with the SEC on the 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 4263715 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 Eastern Time. 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?

Thank you, Satish, and good afternoon everyone. Reflecting on 2008, given the challenges we have faced and the accomplishments made, it was a pivotal year in our history. We started the year still operating under the shadow of the FTC's remedy order, which followed from the deeply flawed liability findings. In April, the D.C. Court of appeal overturned and vacated FTC's order by a three to zero vote. The court later denied the FTC's request for a rehearing by an eleven to zero votes. In our reading, was a strong repudiation by the Appellate court, the FTC has appealed to the Supreme Court. In March, when the coordinated trials against Micron, Hynix and Nanya, were heard in Judge White's court in San Jose found unanimously that Rambus did not engage in anticompetitive conduct or make any misrepresentations while a member of JEDEC in the early 1990. And we are able to put aside the case tried in Virginia, the Supreme Court denied Samsung's request for appeal. But the Court of Appeals for the Federal Circuit decisions to vacate the order. All of these accomplished, thanks to the hard work of our legal team led by Tom Lavelle. Progress on the legal front, however, never seems to proceed in a straight line. Despite the fact that Judge White found that the document retention plan we hadn’t placed back in the late 1990 staffer that Robinson in Delaware and presented with largely the same set of facts and came to a different conclusion. Conclusion with which we respectfully, but nonetheless strongly disagree one which we plan to appeal. To say, we are disappointed with the gross understatement. The other frustrations the shareholders feel regarding the slowness of the process. But we are no less determined and will continue to setback potential of our intellectual property of seeking fair compensation review. Given the adversity we have overcome in the past and the quality and commitment of the teams at Rambus, we remain confident we will ultimately prevail. Turing now to our performance in fourth quarter, we delivered revues of $37.6 million, which was above top end of our guidance. This result was driven by our licensees paying us royalties. It had been withheld for the FTC's remedy order. As I mentioned earlier, those FTC orders have now been vacated. Needless to say, this was a one-time benefit to revenues. In the past year, we worked through a very difficult restructuring with stocks eliminating about 90 positions. With the restructuring, we expect to achieve about $70 million in annual cost savings. Further, we maintain a strong cash position with $346 million at year end. We remain confident in the financial strength of the company. Our cash position gives us the flexibility with few opportunities that present themselves that complement through acquisitions a strong internal effort to drive innovations. Given the economy and the challenges many are facing, there is no shortage of opportunities. Meanwhile, thanks to our continued investment in research and development at the end of Q4, we had 740 issued patterns, other 501 pending applications. We have also seen continued progress on the technology development front. Just recently ELPIDA announced it has started sampling a 1 Gigabyte XDR2 DRAM device that delivers an astounding 7.2 gigabit per second data rate, making it the world's fastest DRAM.. Putting this in context, single XDR DRAM running at 7.2 gigabit per second enables an aggregate bandwidth up to 28.8 gigabytes per second. That's an order of magnitude, more bandwidth and the fastest DDR3 device can deliver. Thanks to the outstanding Rambus technology behind XDR memory architecture. Though it was introduced in 2003, XDR outperformed the latest DDR5 memory, launched five years latter. We are further demonstrating the benefits with the XDR roadmap for cost conscious applications such as set-top boxes and HDTV demonstrating the XDR memory controllers can operate reliably at high speeds and ultra low-cost type packages. Thanks to Rambus innovations, this low-cost packaged technology alone can help XDR controller customers save an estimated $1 to $1.5 in the bill of materials costs of HDTV chip that typically sell for $10 to $15. We will be presenting the results of this effort as well as showcasing it in the silicon demo next week at [design time]. We also will be presenting five other papers at the show. One of these papers for instance will discuss more state-of-the-art advancements as part of the Terabyte Bandwidth Initiative unveiled at the end of 2007. The team is also delivering some interesting technology papers at ISSC in February. And we'll have more exciting technologies developments to unveil in the near future. For example, the mobile market offers some great opportunities for innovation. We're planning to offer computer-intensive media rich application in the sleek small form factors and remain within the power constraints of current battery technology with enormous challenges from mobile platform designers. Tremendous challenges offer great opportunity for engineers and scientists at Rambus. We are gearing up to outline key innovations that will enable high-performance, low-power memory architecture at least in the next-generation of mobile phones and multimedia products. Check in for more news on this front. And with that I will turn the call over to Tom to discuss our legal activities. Tom?

Thanks, Harold and good afternoon everyone. As Harold just mentioned and as we discussed at our January 9 special conference call, we did experience some setback in Delaware with Judge Robinson finding that we spolidated documents in bad faith. A finding that is completely contrary to what Judge Whyte found on the same issues in 2006 in the Hynix 1 case. As a result, Judge Robinson found 12 of our patents unenforceable against Micron. We plan to appeal her decisions, but we understand that the real question, how this will impact the coordinated trial currently in front of Judge Whyte? A hearing was held on January 14 in front of Judge Whyte where he indicated he is currently weighing his options. All parties are filed brief and all arguments will be heard tomorrow. One of the options we are considering is to close out outstanding issues so that we can enter the final judgment in Hynix 1 and certify Micron and Nanya’s conduct based claims, Samsung's spoliating and licensing claims, and perhaps the claims construction in the '05, '06 cases for appeal. Under this option, the court would stay the patent trials to allow the appellate process to play out. We think the most efficient and fair approach would be for the court to resolve pending issues so that it could enter final judgment in Hynix 1, and certify for appeal the conduct based claims relative to Micron and Nanya as well as Samsung's California Law section 17200 in contract range. While going forward with the patent filed on DDR2 plus claims against all four defendents, as we currently stand, Judge Whyte scheduled the patent filed to begin in February 17. Moving now to the price fixing case in San Francisco. While that is still scheduled to begin March 15 in front of Judge Kramer. With regards to the complaint we filed in the international trade commission against NVIDIA corporation and other companies [inaudible] is used in video products. The ITC in early December granted our request for investigation. Our first meeting with the administrative law judge will also be held tomorrow in Washington DC. Going back to the FTC, as Harold mentioned, through our success in overturning that order, we had stronger than expected revenues for the fourth quarter. However, as expected, the FTC filed a petition for certiorari with the Supreme Court at the end of November. We filed our opposition read to that writ last week and we could hear anytime between the end of February and October as to whether or not the Court will grant the writ here to take. As we outlined in our opposition brief, we believe the petition's full review would be denied. During the quarter we received notification from the USPTO that NVIDIA and Micron, separately have filed reexamination request regarding some of our patents involved in the cases. To-date, 26 reexamination requests have been filed against 20 of our patents in various law suits. And the USPTO has issued eight office actions. Note, however, that once patents are issued by the USPTO, they are presumed out until all appeals by the patentee as us in this case has been exhausted. One study indicated that it takes upto six and half years for a re-exam claims to work their way through the USPTO and then the cases can be appealed with the Federal Circuit and possibly to the US Supreme Court. So, this is a very long process. And the patents remain valid during the whole process. We have a lot of important legal events in the months ahead. We will keep you updated. With that I will turn the call back to Satish to review the financials. Satish?

Thanks Tom. As reflected in our press release today, we finished the fourth quarter with revenues of $37.6 million, up 28% from the previous quarter and down 7% from the year ago quarter. Revenues were high due to the collection of $5.2 million or substantially all of the remaining FTC related amount previously held in abeyance. As you will recall, the FTC order was vacated allowing us to collect the license fees in accordance with the contractual obligations with our customers. As compared to the previous quarter, the increase in revenue was also driven by high royalty including the withheld royalties and higher technology royalties related to the PSP. The increasing PSP royalties were associated with seasonality in Q4. The decrease in revenue of 7% from a year ago was primarily due to lower contract related revenues associated with lower bookings. We completed 2008 with full-year revenues of $142.5 million, down 21% from the previous year. The decrease in revenue was primarily due to the decrease in patent royalty payments from Amanda and Elpida. Operating expenses for the fourth quarter was $55.6 million down 7% from the previous quarters and down 23% from the fourth quarter of last year. These operating expenses include approximately $8.7 million of stock-based compensation, 200,000 in restructuring cost and a credit of 300,000 related to patent stock option restatement. To provide a better comparison period-over-period, I'm excluding expenses related to these from my discussion. Excluding stock-based compensation, restructuring and restatement expenses, adjusted operating expenses in this quarter at $47.1 million were up 6% from the previous quarter and down 10% from the quarter year-ago. This includes litigation expenses. Excluding litigation our controllable expenses were down 19% from a year ago. The increase from the previous quarter was primarily due to higher litigation expenses and higher SG&A cost. The decrease from the quarter year ago was primarily due to lower engineering and SG&A offset in part by higher litigation expense. Adjusted engineering expenses of $17 million were essentially flat to the prior quarter. SG&A excluding litigation at $12.4 million was up 11% partially due to internal transfer of a group from engineering. And litigation at $17.7 million was up $2 million or 12% from the previous quarter due to the higher case related activity. From the quarter year ago, adjusted engineering expenses were lower by 25% primarily due to lower cost of contract related expenses, compensation and facility and [IT]. SG&A excluding litigation was lower by 10% to lower profit margin and consulting, travel and accounting as well as audit cost. And litigation was higher by 10%. Our adjusted operating loss for this quarter was $9.5 million or 37% lower from the previous quarters and 20% lower than the fourth quarter of 2007. For the full-year, operating expenses were $231.2 million, down 8% from the previous year. These operating expenses include approximately $37.7 million of stock-based compensation, $4.2 million in restructuring costs, $3.3 million in expenses related to prior stock option restatement issues, and $2.2 million in impairment charges. Again to provide a better comparison I am excluding expenses related to these from my discussion. Excluding these expenses, adjusted operating expenses for the year at $184.4 million were up 5% from the previous year due to higher litigation expenses. Excluding litigation, these controllable expenses at $128.8 million were down 6%. Litigation was up $16.2 million or 41% from the previous year due to higher case related activity. Our adjusted operating loss for the year was $41.9 million as compared to the adjusted operating profit of $4 million in the previous year. Overall cash, defined as cash, cash equivalents and marketable securities excluding liquid cash was $346 million a decrease of approximately $33 million from the third quarter of 2008. During the fourth quarter, we repurchased 1.6 million shares at an average price of approximately $9.02 amounting to $14.3 million. We also spent $18.7 million to repurchase and retire 23.1 million of face value zero coupon convertible notes that are due in February of 2010. In addition, we received $2.9 million from stock option exercises. Year-over-year, cash was down by $95 million. During the year, we spent approximately $49 million to repurchase shares, $18.7 million to repurchase the convertible bonds and $18.3 million to settle the class action stock option lawsuit which was offset in part by the [5 million] received as reimbursements from an insurance carrier and approximately $18 million fee from stock option exercises. As noted from above, litigation expenses continue to be a significant in varying portion of our operating costs. During the quarter and full-year we incurred $17.7 million and $25.7 million of litigation cost, respectively. The restructuring that we announced in the third quarter along with our ongoing focus on maintaining a strong balance sheet into [inaudible] continue to pursue a strategy with solid funding. Now, I will give you some thoughts regarding the fourth quarter. This guidance reflects a reasonable estimate and our actual results could differ materially from what I am about to review. We expect third quarter revenue to be between $26 million and $30 million. We expect operating expenses excluding stock based compensation to be between $57 million and $64 million which includes an estimate for litigation expenses of $25 million to $31 million. Litigation expenses are difficult to predict because we do not control time lines and request from the courts nor do we control the actions that our advisories may take which may cause us to incur additional expenses in any particularly quarter. That concludes our prepared remarks. Operator, would you please open the call for questions.

(Operator Instructions). We will have our first question from Jeff Schreiner with Capstone Investments. Jeffrey Schreiner - Capstone Investments: Good afternoon, everyone. Thank you very much for taking my call. Tom, the first question I have, I was just wondering, could you provide some interpretation for us, for investors and what if any significant Judge Robinson's decision to stay providing a final ruling over in Delaware has or might have on the Northern District of California proceeding with Judge Whyte?

Yes, it's a good question. Thanks Jeff. We are hoping and expecting that the two judges who have nearly opposite ruling from the same set of facts, will enable the cases to go up on appeal together and that I think would make an awful lot of sense from a judicial efficiency point of view and enabling things to get resolved as expeditiously as possible. And so that's what we're hoping and expecting is happening with respect to Judge Robinson. Judge Whyte has already indicated he is interested in accomplishing that same goal as I have pointed out in my prepared remarks. Jeffrey Schreiner - Capstone Investments: All right thanks just another question here. What about the others they are getting tomorrow obviously after all the briefings were filed as to what impact if any Delaware may have in Judge Whyte's court room. Would it be logical to think that, that decision will need to be made before the first free trial hearing on February 5th?

I would hope so but I don want to predict that, certainly it's going happen before February 17th and obviously it would make sense to make it earlier than that. We'll probably know a lot more after tomorrow afternoon's hearing in front of Judge Whyte. Jeffrey Schreiner - Capstone Investments: Okay, one more for you, Tom. Do you have any more insight, you just stated tonight on the call the trial takes place on 16th of March in terms of Judge Kramer's court, any more insight into whether or not the defendants in that case are going to try to bring a Delaware decision into that case?

Yes there is definitely an intent on the part of the defendants to bring in the Delaware decision to try to impact that case. Whether they are successful is a very different question. Keep in mind that the San Francisco case is not a patent case. It is an unfair competition effectively anti-trust case that doesn't depend on patents whatsoever, and it is our expectations and hope that the Delaware decision has no impact on San Francisco but again it's a court of law and we'll find out more when we are in front of Judge Kramer. Jeffrey Schreiner - Capstone Investments: Okay just one last question thank you. Sharon, if you are there. I if not maybe Herald we are just trying to get an understanding now. We've seen that before, we saw a lot of momentum coming. The FTC (inaudible) and it seems to almost shut life and came down for the greater part of two years. What impact are you seeing right now, or what are customers saying in relations to the Delaware ruling and how is that impacting licensing right now?

Well I can make a few comments, obviously I can't talk about specific engagements we have going on. Certainly we've been asked many questions by our existing licensees, they are just curious to understand our take on the situation. But nothing's really beyond that. In terms of companies that are in discussions with us now about taking a license. As you would expect, anything like the Delaware decision is useful from a negotiation standpoint and we certainly expect our lease to continue to bring it up in the context of our negotiations. But so far it's too early to say what real definitive impact there will be. Jeffrey Schreiner - Capstone Investments: Okay thank you very much for taking my questions.

: : Michael Cohen - NBC Financials: Thank you very much for taking my call and congratulations on reducing quarterly expenses by almost $17 million over last few quarters that's quite a feat. And also congratulations on the buyback of the convertible debt I think that was a pretty good move. My first question is probably for, Sharon. I was wondering if you could give us an update on who is currently licensed to produce XDR Memory. And which companies then are actually producing it, maybe list that in order of who is producing much quantity?

So there are three companies who are currently licensed to produce XDR DRAM, Elpida, Qimonda and Samsung are currently licensed and are all shipping XDR DRAM devices. Michael Cohen - NBC Financials: And which ones are producing if you could give us the three companies in the order of which one is producing or shipping them out?

That's a very good question I certainly know that Elpida is shipping the highest volumes; between the other two companies it's I don't even want to hurry through the guess. But they are all shipping I can definitely say that Elpida is shipping in the highest volumes currently. Michael Cohen - NBC Financials: Okay. And my next question for Tom, I was wondering Tom could you disclose the total amount of damages that Rambus is seeking in the anti-trust trial in San Francisco?

We will be able to do that after the trial starts, but I can’t do that now. Michael Cohen - NBC Financials: Okay. And this is my next question, something you probably don’t have the answer to right in front you, but I was wondering if you could at some point give us a total figure on the amount of litigations expenses have been spent going all the way back to 2000?

As of six month number, we had about 250, so I am pretty sure, it's very close to $300 million plus minus, maybe $20 million at this point in time, but we can definitely tell you about it, it shouldn't be very difficult, but it's not a small number. Michael Cohen - NBC Financials: Okay, and that’s close and I was mostly just curious. Okay thank you very much appreciate it.

You’re welcome.

That concludes our question-and-answer session; I will turn the conference back over to Mr. Harold Hughes, for additional or closing remarks.

Thank you very much for coming and looking forward to talking to you next quarter.

That concludes today's conference. You may disconnect at this time. We do appreciate your participation.