Netlist, Inc. (PNK:NLST) Q1 2023 Earnings Call Transcript

Suji Desilva: Okay, Chuck, appreciate that clarification. Last question, if I take just a simple division of the damages by the patents and then the number of units you talked about in the prepared remarks, the timeframe probably is not as relevant there. Is that a proxy for the royalty rate that can be applied across these cases, or is there something specific about the Samsung damages case that might make that calculation not particularly accurate there?

Chuck Hong: Well, that is the jury’s calculation and their decision. So that is the simple math. If we want to get to a per-unit royalty, reasonable per unit royalty as determined by this jury, yes, you basically do simple math, simple division of the total damages that were awarded by the number of units that were shipped over that period of time. I think what is relevant in terms of the period of time is it was a relatively short period of time anywhere between a year and a year and a half, depending on the patent and the products. And that was determined by the judge at the outset of trial. Now, what is important to note is that those volumes for those products, LRDIMM notwithstanding, LRDIMM, DDR4, is a fairly mature product that has been shipping for now five, six, seven years, but HBM particularly for Samsung, which is late the game compared to Hynix, Hynix owns about 70% of the HBM market.

The Samsung is therefore quickly trying to catch up. The HBM volumes as well as the DDR5 product volumes are really — they’re probably the top of the first inning, it’s a baseball analogy in terms of where they are in their lifecycle.

Suji Desilva: Okay. Thanks Chuck. Thanks Gail. Congrats on the findings from Texas.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.