This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including any statements regarding trends in future revenue or results of operations, gross margin or operating margin, expenses, earnings or losses from operations, synergies or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning developments, performance or industry ranking; any statements regarding future economic conditions or performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Generally, the words "anticipate," "believes," "plans," "expects," "future," "intends," "may," "should," "estimates," "predicts," "potential," "continue" and similar expressions identify forward-looking statements. Our forward-looking statements are based on current expectations, forecasts and assumptions and are subject to risks, uncertainties and changes in condition, significance, value and effect. As a result of the factors described herein, and in the documents incorporated herein by reference, including, in particular, those factors described under "Risk Factors," we undertake no obligation to publicly disclose any revisions to these forward-looking statements to reflect events or circumstances occurring subsequent to filing this report with the Securities and Exchange Commission.

Rambus, RDRAM, XDR, FlexIO and FlexPhase are trademarks or registered trademarks of Rambus Inc. Other trademarks that may be mentioned in this quarterly report on Form 10-Q are the property of their respective owners.

Industry terminology, used widely throughout this report, has been abbreviated and, as such, these abbreviations are defined below for your convenience:

Double Data Rate                         DDR
Dynamic Random Access Memory             DRAM
Fully Buffered-Dual Inline Memory Module FB-DIMM
Gigabits per second                      Gb/s
Graphics Double Data Rate                GDDR
Input/Output                             I/O
Peripheral Component Interconnect        PCI
Rambus Dynamic Random Access Memory      RDRAM
Single Data Rate                         SDR

From time to time we will refer to the abbreviated names of certain entities and, as such, have provided a chart to indicate the full names of those entities for your convenience.

Advanced Micro Devices Inc.                 AMD
ARM Holdings plc                            ARM
Cadence Design Systems, Inc.                Cadence
Cisco Systems, Inc.                         Cisco
Elpida Memory, Inc.                         Elpida
Fujitsu Limited                             Fujitsu
GDA Technologies, Inc.                      GDA
Hewlett-Packard Company                     Hewlett-Packard
Hynix Semiconductor, Inc.                   Hynix
Infineon Technologies AG                    Infineon
Inotera Memories, Inc.                      Inotera
Intel Corporation                           Intel
International Business Machines Corporation IBM
Joint Electron Device Engineering Council   JEDEC
Juniper Networks, Inc.                      Juniper
Matsushita Electrical Industrial Co.        Matsushita
Micron Technologies, Inc.                   Micron
Nanya Technology Corporation                Nanya
NEC Electronics Corporation                 NEC
Optical Internetworking Forum               OIF

Qimonda AG (formerly Infineon's DRAM operations)           Qimonda
Panasonic Corporation                                      Panasonic
Peripheral Component Interconnect - Special Interest Group PCI-SIG
Renesas Technology Corporation                             Renesas
Samsung Electronics Co., Ltd.                              Samsung
Sony Computer Electronics                                  Sony
Spansion, Inc.                                             Spansion
ST Microelectronics                                        ST Micro
Synopsys Inc.                                              Synopsys
Tessera Technologies, Inc.                                 Tessera
Texas Instruments Inc.                                     Texas Instruments
Toshiba Corporation                                        Toshiba
Velio Communications                                       Velio

Business Overview

We design, develop and license chip interface technologies and architectures that are foundational to nearly all digital electronics products. Our chip interface technologies are designed to improve the performance, power efficiency, time-to-market and cost-effectiveness of our customers' semiconductor and system products for computing, gaming and graphics, consumer electronics and mobile applications.

As of September 30, 2009, our chip interface technologies are covered by more than 840 U.S. and foreign patents. Additionally, we have approximately 580 patent applications pending. These patents and patent applications cover important inventions in memory and logic chip interfaces, in addition to other technologies. We believe that our chip interface technologies provide our customers a means to achieve higher performance, improved power efficiency, lower risk, and greater cost-effectiveness in their semiconductor and system products.

Our primary method of providing interface technologies to our customers is through our patented innovations. We license our broad portfolio of patented inventions to semiconductor and system companies who use these inventions in the development and manufacture of their own products. Such licensing agreements may cover the license of part, or all, of our patent portfolio. Patent license agreements are generally royalty bearing.

We also develop a range of solutions including "leadership" (which are Rambus-proprietary interfaces or architectures widely licensed to our customers) and industry-standard chip interfaces that we provide to our customers under license for incorporation into their semiconductor and system products. Due to the often complex nature of implementing state-of-the art chip interface technology, we offer engineering services to our customers to help them successfully integrate our chip interface solutions into their semiconductors and systems. These technology license agreements may have both a fixed price (non-recurring) component and ongoing royalties. Engineering services are generally offered on a fixed price basis. Further, under technology licenses, our customers may receive licenses to our patents necessary to implement the chip interface in their products with specific rights and restrictions to the applicable patents elaborated in their individual contracts with us.

We derive the majority of our annual revenue by licensing our broad portfolio of patents for chip interfaces to our customers. Such licenses may cover part or all of our patent portfolio. Leading semiconductor and system companies such as AMD, Fujitsu, Intel, NEC, Panasonic, Renesas, and Toshiba have licensed our patents for use in their own products.

We derive additional revenue by licensing our leadership architectures and industry-standard chip interfaces to customers for use in their semiconductor and system products. Our customers include leading companies such as Elpida, IBM, Intel, Panasonic, Sony and Toshiba. Due to the complex nature of implementing our technologies, we provide engineering services under certain of these licenses to help our customers successfully integrate our technology solutions into their semiconductors and system products. Additionally, licensees may receive, as an adjunct to their technology license agreements, patent licenses as necessary to implement the technology in their products with specific rights and restrictions to the applicable patents elaborated in their individual contracts.

Royalties represent a substantial majority of our total revenue. The remaining part of our revenue is contract services revenue which includes license fees and engineering services fees. The timing and amounts invoiced to customers can vary significantly depending on specific contract terms and can therefore have a significant impact on deferred revenue or unbilled receivables in any given period.

We have a high degree of revenue concentration, with our top five licensees representing approximately 79% and 77% of our revenue for the three and nine months ended September 30, 2009, respectively. This compares with the three and nine months ended September 30, 2008, in which revenue from our top five licensees accounted for approximately 72% and 67% of our revenue, respectively. For the three months ended September 30, 2009, revenue from Fujitsu, NEC, Panasonic, AMD and Toshiba each accounted for 10% or more of our total revenue. For the nine months ended September 30, 2009, revenue from Fujitsu, NEC, AMD, Panasonic, Toshiba and Sony each accounted for 10% or more of our total revenue. For the three months ended September 30, 2008, revenue from Fujitsu, Panasonic, NEC, AMD and Sony each accounted for 10% or more of our total revenue. For the nine months ended September 30, 2008, revenue from Fujitsu, Elpida, Sony, AMD, Panasonic and NEC each accounted for 10% or more of our total revenue.

Our revenue from companies headquartered outside of the United States accounted for approximately 83% and 82% of our total revenue for the three and nine months ended September 30, 2009, respectively as compared to 80% and 82% for the three and nine months ended September 30, 2008, respectively. We expect that we may continue to experience significant revenue concentration and have significant revenue from sources outside the United States for the foreseeable future.

Historically, we have been involved in significant litigation stemming from the unlicensed use of our inventions. Our litigation expenses have been high and difficult to predict and we anticipate future litigation expenses will continue to be significant, volatile and difficult to predict. If we are successful in the litigation and/or related licensing, our revenue could be substantially higher in the future; if we are unsuccessful, our revenue would likely decline. Furthermore, our success in litigation matters pending before courts and regulatory bodies that relate to our intellectual property rights have impacted and will likely continue to impact our ability and the terms upon which we are able to negotiate new or renegotiate existing licenses for our technology.

We expect that revenue derived from international licensees will continue to represent a significant portion of our total revenue in the future. To date, all of the revenues from international licensees have been denominated in U.S. dollars. However, to the extent that such licensees' sales to systems companies are not denominated in U.S. dollars, any royalties that we receive as a result of such sales could be subject to fluctuations in currency exchange rates. In addition, if the effective price of licensed semiconductors sold by our foreign licensees were to increase as a result of fluctuations in the exchange rate of the relevant currencies, demand for licensed semiconductors could fall, which in turn would reduce our royalties. We do not use financial instruments to hedge foreign exchange rate risk.

Results of Operations

The following table sets forth, for the periods indicated, the percentage of
total revenue represented by certain items reflected in our unaudited condensed
consolidated statements of operations:

                                              Three Months Ended              Nine Months Ended
                                                 September 30,                  September 30,
                                              2009           2008            2009           2008
Revenue:
Royalties                                        96.5 %         87.7 %          94.7 %         86.9 %
Contract revenue                                  3.5 %         12.3 %           5.3 %         13.1 %
Total revenue                                   100.0 %        100.0 %         100.0 %        100.0 %
Costs and expenses:
Cost of contract revenue*                         6.7 %         15.7 %           6.7 %         17.6 %
Research and development*                        60.0 %         59.5 %          61.2 %         56.3 %
Marketing, general and administrative*          107.2 %        106.3 %         121.1 %         84.2 %
Restructuring costs                                 - %         13.7 %             - %          3.8 %
Impairment of asset                                 - %          7.3 %             - %          2.1 %
Costs (recovery) of restatement and
related legal activities                          0.2 %          1.3 %         (17.0 )%         3.4 %
Total costs and expenses                        174.1 %        203.8 %         172.0 %        167.4 %
Operating loss                                  (74.1 )%      (103.8 )%        (72.0 )%       (67.4 )%
Interest income and other income
(expense), net                                    3.2 %          9.2 %           4.3 %          9.7 %
Interest expense                                (27.4 )%       (10.2 )%        (16.0 )%        (8.4 )%
Interest and other income (expense), net        (24.2 )%        (1.0 )%        (11.7 )%         1.3 %
Loss before income taxes                        (98.3 )%      (104.8 )%        (83.7 )%       (66.1 )%
Provision for income taxes                        0.3 %          0.3 %           0.1 %        109.0 %
Net loss                                        (98.6 )%      (105.1 )%        (83.8 )%      (175.1 )%


____________

*Includes stock-based compensation:

Cost of contract revenue                   1.0 %      4.5 %      1.1 %      4.4 %
Research and development                   8.4 %     11.3 %      8.9 %     10.5 %
Marketing, general and administrative     18.4 %     14.9 %     19.3 %     12.3 %
Restructuring costs                          - %      1.9 %        - %      0.5 %



                               Three Months                                       Nine Months
                            Ended September 30,          Change in            Ended September 30,          Change in
(Dollars in millions)      2009             2008         Percentage          2009             2008         Percentage
Total Revenue
Royalties               $     26.9       $     25.8              4.3 %    $     77.8       $     91.2            (14.6 )%
Contract revenue               1.0              3.6            (73.1 )%          4.4             13.7            (68.2 )%
Total revenue           $     27.9       $     29.4             (5.3 )%   $     82.2       $    104.9            (21.6 )%

Royalty Revenue

Patent Licenses

In the three and nine months ended September 30, 2009, our largest source of royalties was related to the license of our patents for SDR and DDR-compatible products. Royalties decreased approximately $1.5 million and $14.4 million for SDR and DDR-compatible products in the three and nine months ended September 30, 2009, respectively, as compared to the same periods in 2008, due primarily to lower licensing payments received as a result of, among other things, the expiration of Elpida licensing agreement in the first quarter of 2008.

We are in negotiations with prospective and existing licensees. We expect SDR and DDR-compatible royalties will continue to vary from period to period based on our success in renewing existing license agreements and adding new licensees, as well as the level of variation in our licensees' reported shipment volumes, sales price and mix, offset in part by the proportion of licensee payments that are fixed.

Technology Licenses

In the three and nine months ended September 30, 2009, royalties from XDR, FlexIO, DDR and serial link-compatible products represented the second largest category of royalties. Royalties from these products increased approximately $2.9 million and decreased approximately $0.4 million during the three and nine months ended September 30, 2009, respectively, as compared to the same periods in 2008. The variance was due primarily to the fluctuation of royalties from the Sony PLAYSTATION®3 and shipments by our customers that included customized DDR solutions. In the future, we expect royalties from XDR, FlexIO, DDR and serial link-compatible products will continue to vary from period to period based on our licensees' shipment volumes, sales prices and product mix.

In the three and nine months ended September 30, 2009, royalties from RDRAM compatible products represented the third largest source of royalties. Royalties from RDRAM memory chips and controllers decreased approximately $0.3 million and increased $1.4 million during the three and nine months ended September 30, 2009, respectively, as compared to the same periods in 2008. The variance was due primarily to the fluctuation of royalties from the Sony PlayStation®2 due to the fluctuation of shipment volumes.

Contract Revenue

Percentage-of-Completion Contracts

Percentage of completion contract revenue decreased approximately $2.4 million and $7.9 million for the three and nine months ended September 30, 2009, respectively, as compared to the same periods in 2008. The decrease is due to decreased amount of work performed on both leadership and industry standard chip interface contracts. We believe that percentage-of-completion contract revenue recognized will continue to fluctuate over time based on our ongoing contractual requirements, the amount of work performed, and by changes to work required, as well as new contracts booked in the future.

Other Contracts

Revenue for other contracts decreased approximately $0.2 million and $1.5
million for the three and nine months ended September 30, 2009, as compared to
the same periods in 2008. The decrease is due to decreased volume from industry
standard chip interface contracts. We believe that other contracts revenue will
continue to fluctuate over time based on our ongoing contract requirements, the
timing of completing engineering deliverables, as well as new contracts booked
in the future.

Engineering costs:

                            Three Months Ended                                Nine Months Ended
                               September 30,             Change in              September 30,             Change in
(Dollars in millions)      2009             2008         Percentage          2009            2008         Percentage
Engineering costs
Cost of contract
revenue                 $      1.6       $      3.3            (52.1 )%   $      4.6       $    13.8            (66.9 )%
Stock-based
compensation                   0.3              1.3            (78.6 )%          0.9             4.6            (80.3 )%
Total cost of
contract revenue               1.9              4.6            (59.7 )%          5.5            18.4            (70.2 )%
Research and
development                   14.4             14.2              1.5 %          43.0            48.0            (10.5 )%
Stock-based
compensation                   2.3              3.3            (29.9 )%          7.3            11.0            (33.7 )%
Total research and
development                   16.7             17.5             (4.5 )%         50.3            59.0            (14.9 )%
Total engineering
costs                   $     18.6       $     22.1            (16.0 )%   $     55.8       $    77.4            (28.0 )%

Total engineering costs decreased 16.0% and 28.0% for the three and nine months ended September 30, 2009, respectively, as compared to the same periods in 2008, due primarily to lower headcount and the related decrease in salary, benefits and stock based compensation expenses as well as decreases in consulting costs as a result of our cost reduction initiatives that commenced in the second half of 2008.

In the near term, we expect engineering expenses will continue to be lower than in 2008 as a result of our cost reduction initiative undertaken in 2008. We intend to continue to make investments in the infrastructure and technologies to maintain our leadership position in chip interface technologies and quarterly expenses could vary.

Marketing, general and administrative costs:

                            Three Months Ended                                Nine Months Ended
                               September 30,             Change in              September 30,              Change in
(Dollars in millions)      2009             2008         Percentage          2009            2008         Percentage
Marketing, general
and administrative
costs
Marketing, general
and administrative
costs                   $     12.8       $     11.2             14.1 %    $     38.8       $    37.5               3.5 %
Litigation expense            12.0             15.7            (23.8 )%         45.0            38.0              18.4 %
Stock-based
compensation                   5.1              4.4             17.4 %          15.8            12.9              22.7 %
Total marketing,
general and
administrative costs    $     29.9       $     31.3             (4.5 )%   $     99.6       $    88.4              12.7 %

Total marketing, general and administrative costs decreased 4.5% for the three months ended September 30, 2009 as compared to the same period in 2008 due primarily to the decreased litigation expenses related to ongoing major cases, offset by increased stock based compensation expenses primarily related to nonvested equity awards granted during 2008. Total marketing, general and administrative costs increased 12.7% for the nine months ended September 30, 2009 as compared to the same period in 2008 due primarily to the increased litigation expenses related to ongoing major cases and increased stock based compensation expenses primarily related to nonvested equity awards granted during 2008.

Non-litigation related marketing, general and administrative costs increased 14.1% for the three months ended September 30, 2009 as compared to the same period in 2008 due primarily to patent acquisition activities in the third quarter of 2009 and higher headcount in corporate development as a result of our strategic initiatives related to our investment activities. Non-litigation related marketing, general and administrative costs increased 3.5% for the nine months ended September 30, 2009 as compared to the same period in 2008 due primarily to ongoing patent acquisition activities in 2009 and higher headcount in corporate development as a result of our strategic initiatives related to our investing activities, offset by decreases in consulting and professional fees and overall marketing expenses related to cost reduction initiatives taken in 2008.

In the future, marketing, general and administrative costs will vary from period to period based on the trade shows, advertising, legal, and other marketing and administrative activities undertaken, and the change in sales, marketing and administrative headcount in any given period. Litigation expenses are expected to vary from period to period due to the variability of litigation activities, but are expected to remain at levels higher than 2008 for the foreseeable future.

Restructuring costs:

                               Three Months Ended                               Nine Months Ended
                                  September 30,             Change in             September 30,             Change in
(Dollars in millions)       2009                2008       Percentage       2009                2008       Percentage

During the third quarter of 2008, we initiated a workforce reduction in certain areas of excess capacity. The cash severance, including continuance of certain employee benefits, totaled approximately $3.5 million and non-cash employee severance of approximately $0.5 million of stock-based compensation expense. The total restructuring charge for the three month period ended September 30, 2008 was approximately $4.0 million. We paid approximately $1.6 million of severance and benefits during the quarter ended September 30, 2008. The remaining $1.9 million of severance was paid during the fourth quarter of 2008.

Impairment of Intangible asset:

                               Three Months Ended                               Nine Months Ended
                                  September 30,             Change in             September 30,             Change in
(Dollars in millions)       2009                2008       Percentage       2009                2008       Percentage
Impairment of

During the three months ended September 30, 2008, we determined that approximately $2.2 million of our intangible assets had no alternative future use and was impaired as a result of a customer's change in technology requirements. The intangible asset relates to a contractual relationship acquired in the Velio acquisition during December 2003.

Costs (recovery) of restatement and related legal activities:

                             Three Months Ended                          Nine Months Ended
                                September 30,           Change in          September 30,           Change in
(Dollars in millions)       2009             2008      Percentage       2009            2008      Percentage
Costs (recovery) of
restatement and
related legal

* NM - percentage is not meaningful as the change is too large

Costs (recovery) of restatement and related legal activities consist primarily of investigation, audit, legal and other professional fees related to the 2006-2007 stock option investigation and the filing of the restated financial statements and related litigation.

Costs of restatement and related legal activities were $0.1 million for the three months ended September 30, 2009 due primarily to litigation expense associated with the derivative lawsuit related to the 2006-2007 stock option investigation, partially offset by recognition of an insurance settlement of $0.4 million from an insurance carrier in connection with the derivative and . . .