Micron, the U.S. memory company, has ended its patent dispute with memory technology firm Netlist and agreed to pay $600 million over five years.
Micron will receive a five-year, nonexclusive license to Netlist’s patents, including those covering server memory modules and high-bandwidth memory (HBM). It will pay $30 million per quarter from the fourth quarter of 2026 through the third quarter of 2031.
Micron will also purchase 10 million shares of Netlist common stock for $1 million, or 10 cents per share. Restrictions on selling the shares will be lifted in 20% increments each year over five years.
U.S. memory chipmaker Micron has ended its long-running patent dispute with memory technology company Netlist in a settlement.
Netlist disclosed to the U.S. Securities and Exchange Commission (SEC) on Oct. 6 (local time) that it had entered into a patent license and settlement agreement with Micron on Oct. 5. The two companies agreed to dismiss all pending lawsuits and legal proceedings.
For the next five years, Micron will be able to use Netlist’s worldwide patent portfolio, including technologies related to server memory modules and high-bandwidth memory (HBM). The license is nonexclusive and may not be transferred to another company or sublicensed.
The total consideration is $600 million. Micron will pay Netlist $30 million per quarter over 20 quarters, from the fourth quarter of 2026 through the third quarter of 2031.
The agreement also includes a stock transaction. Micron will buy 10 million shares of Netlist common stock for a total of $1 million, or 10 cents per share. The shares will be subject to sale restrictions, which will be lifted in 20% increments each year over five years after the agreement.
Netlist CEO C.K. Hong said the agreement demonstrates the value of the company’s memory technology and intellectual property in the AI era. Netlist plans to invest the proceeds in developing next-generation memory technologies and products.
◆ Dispute expanded to HBM after $445 million verdict
The patent dispute between Micron and Netlist had continued for years.
In 2024, a federal jury in Texas found that Micron had infringed Netlist’s memory-related patents and awarded Netlist $445 million in damages. Micron challenged the verdict and continued the legal fight.
The dispute recently expanded to HBM, memory used in AI. In September, Netlist filed a complaint with the U.S. International Trade Commission (ITC), alleging that Micron’s HBM3E, HBM4 and HBM4E products infringed its patents. Nvidia, Broadcom and Google were also named in the complaint. Netlist sought exclusion orders barring imports of the products and orders stopping their sale.
Before that, in August, Netlist filed a separate ITC complaint against Micron, HPE, Lenovo and Super Micro over DDR5 server memory.
HBM is a key type of memory that determines the performance of AI accelerators. An ITC exclusion order could have placed a significant burden on the U.S. AI semiconductor supply chain and Micron’s AI memory business.
The $600 million settlement is larger than the $445 million in damages awarded by the jury in 2024. Rather than paying the amount all at once, however, Micron will pay it over five years and, for the same period, secure the right to use Netlist’s patent portfolio.
Netlist, in turn, will secure a steady stream of quarterly licensing revenue through 2031 instead of pursuing appeals and ITC proceedings for years.
◆ Micron settles after Samsung, bringing all three major DRAM makers under license agreements
Micron is the second major memory maker this year, after Samsung Electronics, to resolve a patent dispute with Netlist.
Samsung Electronics signed a patent license agreement with Netlist on Aug. 4, ending the lawsuits between the two companies.
Samsung paid an upfront license fee of $239 million and will make additional payments of up to $32.9 million per quarter over 20 quarters through the second quarter of 2031. The total payments under the agreement could reach approximately $898 million.
The agreement also included Samsung’s purchase of 10 million shares of Netlist common stock. The two companies additionally signed a supply agreement under which Netlist may purchase up to $300 million worth of Samsung memory products, including DRAM and NAND flash, each year.
Samsung and Netlist had been involved in patent disputes since 2021 in venues including the U.S. District Court for the Eastern District of Texas and the ITC. In April 2023, a federal jury in Texas found that Samsung had infringed Netlist patents and awarded $303 million in damages.
SK hynix had reached a five-year patent license agreement with Netlist earlier, in 2021, ending the legal disputes then underway.
With Samsung and Micron now reaching agreements in succession, all three companies leading the global DRAM market—Samsung Electronics, SK hynix and Micron—have patent license agreements with Netlist.
◆ What is Netlist?
Netlist is a memory technology company founded in California in 2000 by CEO C.K. Hong. Its headquarters are in Irvine, California.
It differs from a typical non-practicing entity (NPE), which acquires patents primarily to pursue infringement lawsuits. Netlist develops and sells server and enterprise memory modules itself, while building up related technologies and patents.
Netlist’s key technologies cover data processing and control methods for memory modules, which place multiple DRAM chips on a substrate for use in servers, as well as high-performance memory architectures. As the AI market grows, patents related to high-performance memory, including HBM, have become increasingly important.
The company’s results are also growing rapidly. Netlist reported revenue of $109.8 million in the second quarter of this year, up 163% from the same period last year. After posting a net loss of $6.1 million in the second quarter of last year, it returned to profitability with net income of $1.4 million this year.
The Micron agreement gives Netlist another source of licensing revenue over the long term. Based on the maximum amounts stipulated in the agreements, quarterly payments from Samsung and Micron could total up to $62.9 million.
As Samsung Electronics, SK hynix and Micron—the leaders of the global memory market—have successively signed agreements with Netlist, the value of memory patents is becoming more prominent alongside the expansion of the AI and HBM markets.