Netlist (OTCMKTS:NLST) announced a five-year strategic alliance with Samsung covering a patent portfolio cross-license, memory product supply, technology cooperation and Samsung’s purchase of Netlist shares.
Chief Executive Officer Chuck Hong said the agreement represents a major milestone for Netlist and described it as one of the most significant patent licensing arrangements in the memory industry. He said the deal validates Netlist’s intellectual property, including patented server DIMM and high-bandwidth memory technologies that the company views as foundational to artificial intelligence computing.
License Fees and Supply Agreement
Over the five-year term, Netlist said the arrangement could produce aggregate net license fees of up to $750 million, or gross license revenue of up to $897 million.
Under a separate supply agreement, Samsung will supply Netlist with up to $300 million of memory products annually and up to $1.5 billion over the five-year period. The products include DRAM and NAND materials for Netlist’s proprietary memory solutions, as well as standard Samsung memory and storage products for resale to Netlist’s customer base.
Sasaki said the supply agreement provides sourcing assurance during a period of high demand and constrained memory supply tied to AI infrastructure build-outs. Samsung will also become a Netlist shareholder through the purchase of 10 million shares of Netlist common stock, subject to standard lock-up provisions.
Settlement of Samsung Proceedings
Rich Kim, Netlist’s vice president of IP strategy, said the overall transaction includes a settlement and release of pending legal proceedings between Netlist and Samsung. Netlist said it will continue defending its patents in Federal Circuit appeals and inter partes review proceedings involving or affecting other parties.
The companies also entered into an International Trade Commission cooperation agreement under which Samsung will provide certain information and declarations that Netlist may use in future ITC actions against third parties.
Kim said Netlist believes unauthorized use of its patented technologies remains widespread across the memory industry. “These agreements will allow Netlist to now focus its full attention on other infringing parties,” he said.
Technology Collaboration Plans
Hong said the companies will jointly explore technology collaboration opportunities. He pointed to Netlist’s work on hybrid CXL memory and low-power MRDIMMs as potential areas of focus.
According to Hong, Netlist has been developing hybrid CXL technology for six to seven years and believes its approach can use lower-cost NAND to emulate the performance of higher-cost DRAM-based CXL memory. He said the approach could reduce CXL memory costs at a time when DRAM pricing is elevated.
Hong also highlighted Netlist’s low-power MRDIMM development efforts. He said MRDIMMs are expected to be a next-generation high-capacity memory module but may face power-consumption constraints. Netlist has been working for three to four years on using low-power DRAM in memory-channel applications and believes it has developed an error-correction approach to address reliability concerns associated with low-power DRAM.
Responding to an analyst question about the supply arrangement, Hong said constrained supply conditions could mean it takes two to three months before products begin to flow. Netlist plans not only to resell Samsung products, he said, but also to incorporate Samsung DRAM and NAND components into its specialized and custom memory products.
Hong said the alliance establishes a recurring, high-margin revenue stream while securing memory supply and advancing Netlist’s strategy to pursue long-term growth in AI computing.
About Netlist (OTCMKTS:NLST)
Netlist, Inc is a technology company specializing in the design and development of high-performance memory and storage subsystems for enterprise and data center applications. The company’s product portfolio encompasses advanced memory modules, nonvolatile memory express (NVMe) solid-state drives and intelligent memory expansion systems. These solutions are engineered to boost memory density, bandwidth and overall system performance in hyperscale, cloud computing and high-performance computing environments.
Headquartered in Irvine, California, Netlist serves customers across the Americas and Asia through a combination of direct sales and channel distribution partners.
