These are wild times in the semiconductor industry, and especially for Intel, which stands to benefit big-time from CHIPS Act money, but also recently reported a dismal second quarter performance that will put more pressure on the company to minimize costs, maximize revenue opportunities, and diligently focus on its bottom line.
That makes all the more interesting a deal IPValue Management, Inc. announced this week with Intel. The companies have entered into a set of agreements that extend IPValue’s ongoing licensing arrangement, as well as transfer an additional portfolio of nearly 5,000 patents to Tahoe Research Limited, a newly formed company within the IPValue Management Group.
In a press release, IPValue described the portfolio as drawing from “nearly two decades of Intel innovation and includes inventions relating to microprocessors, application processors, logic devices, computing systems, memory and storage, connectivity and communications, packaging, semiconductor architecture and design, semiconductor manufacturing, and other technologies.”
Now, IPValue will do what it has done for Intel and other firms–focus on opportunities to license the Tahoe portfolio to its own established and growing network of licensees.
Jack Gold, president and principal analyst at J. Gold Associates, said there could be a number of reasons Intel is choosing to make this move right now.
“First, companies often take older patents that haven’t expired but that are not bleeding edge or that give the company a market advantage, and try to gain revenue from the patents by licensing them,” Gold told Fierce Electronics via email. “It’s a good way to continue to gain advantage from patent work, even if it’s no longer directly mission critical.”
Another possibility specific to Intel’s current situation is it is trying to increase value on its IP portfolio, “both for better revenue” and “also for shareholder value. Their stock has not been doing so well of late,” Gold noted.
He added, “Finally, if you look at competitors like Qualcomm, which generates large amounts of revenues from its IP licensing, it makes sense for Intel to try and take a similar market approach. Why not maximize the return on your investments in R&D by also licensing to others? It’s basically enhancing the value of your IP with minimal additional effort. It’s not that Intel doesn’t license IP (obviously it licenses its x86 IP to AMD among others). But it sounds like this might be a more concerted effort on their part than previously.”
Using a third party license manager allows Intel to increase its revenue opportunities without having to devote more internal labor, time and expense to the effort.
“We are thrilled to engage in this transaction with Intel, and our team of highly experienced IP professionals is excited to get to work licensing the Tahoe portfolio,” said Keith Wilson, executive vice president of Partnerships and Acquisitions at IPValue. “This initiative reinforces IPValue’s mission to reward and fuel innovation and supports Intel’s freedom to operate goals, enabling Intel to focus more of its time and energy doing what it does best: driving innovations that enable global progress and enrich lives.”
“Intel has an unmatched history of creating technologies that underpin the modern global economy,” said Jin-Ki Kim, Chief Technology Officer at IPValue. “This portfolio greatly expands the array of inventions that we are able to bring to our licensees. Our growing team of scientists and engineers is excited to tackle this opportunity as we expand our business.”
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