www.dpreview.com
www.dpreview.com

Lexar and Samsung strike license deal

Apr 19, 2001 at 04:00 GMT

Lexar and Samsung have today announced a partnership agreement under which Samsung will license Lexar's high speed controller technology. The terms of the agreement will enable Samsung to manufacture flash storage devices based on Lexar's controller technology."Samsung Electronics chose to license Lexar Media's unparalleled technology because controller-based solutions are critical to the future of new applications," said Chang-Gyu Hwang, President of Samsung Electronics.

Lexar Media and Samsung Electronics Sign Major Partnership Agreements

FREMONT, Calif., and Seoul, Korea – April 19, 2001 – Samsung Electronics Co., Ltd. (KS: 05930), a world leader in the electronics industry and the leading supplier of memory chips, and Lexar Media, Inc. (NSDQ: LEXR), a leading designer, developer and marketer of award-winning digital film and connectivity products for the digital photography market, announced today that they had signed a landmark licensing agreement.

Under terms of the agreement, Samsung will have a non-exclusive, worldwide, non-transferable, royalty-bearing license for Lexar Media's patented controller technology. Lexar Media's controller-based technology will enable Samsung to develop a wide variety of innovative flash-based products that will drive the growth of the flash memory market in the coming years. Samsung will also have the right to purchase Lexar Media's flash memory controllers for resale and agreed to license its patents pertaining to flash controller technology to Lexar Media.

In addition to the licensing deal, the companies have signed a supply agreement, whereby Lexar Media will purchase a substantial portion of its flash memory needs from Samsung. Samsung, in turn, has guaranteed a certain allocation of flash memory and agreed to provide flash memory to Lexar Media on a consignment basis, insulating Lexar Media from potential fluctuations in pricing and availability.

"Samsung Electronics chose to license Lexar Media's unparalleled technology because controller-based solutions are critical to the future of new applications," said Chang-Gyu Hwang, President of Samsung Electronics. "We anticipate that the Samsung-Lexar Media partnership will greatly expand Samsung's penetration into this quickly emerging market and allow us to offer our customers the best flash solutions."

"This licensing agreement is a defining moment for Lexar Media," said John Reimer, Lexar Media president and CEO. "Samsung is the number one supplier of DRAMs in the world and they have recently stated their goal to become the leading supplier of flash memory. Samsung is already demonstrating technical and cost leadership in its flash products and has an extremely impressive product roadmap. By integrating Lexar Media's patented controller technology into their products, Samsung will be able to produce a variety of low-cost, complex semiconductor devices, particularly those that demand high performance."

Analysts estimate that the market for flash media will grow to more than $5 billion by 2004. Flash media is commonly used in many of today's digital cameras, PDAs, cell phones, video recorders and portable music players. The ever increasing file sizes used by these devices is driving the requirements for high speed media, making Lexar Media's technology critical to enabling future flash memory based products.

"Lexar Media is extremely pleased to enter into this license agreement with Samsung Electronics," said Eric Whitaker, Lexar Media's Vice President of Technology Licensing. "Samsung becomes the third licensee of Lexar Media's patents. Sony was the first licensee of Lexar Media's technology for adaptation in Sony's Memory Stick format. SanDisk was the second licensee of Lexar's patented technology for the production of Smart Media products. Samsung's license covers SmartMedia as well as other flash products. We are pleased that Samsung has recognized the value of Lexar Media's patents in producing flash-based products."

The financial details were not disclosed.