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," "projecting" 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, RDRAMTM, XDRTM, FlexIOTM and FlexPhaseTM 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
Gigabits per second                        Gb/s
Graphics Double Data Rate                  GDDR
Input/Output                               I/O
Light Emitting Diodes                      LED
Liquid Crystal Display                     LCD
Peripheral Component Interconnect          PCI
Rambus Dynamic Random Access Memory        RDRAMTM
Single Data Rate                           SDR
Synchronous Dynamic Random Access Memory   SDRAM
eXtreme Data Rate                          XDRTM

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
Broadcom Corporation                           Broadcom
Cooper Lighting, LLC                           Cooper Lighting
Cryptography Research, Inc.                    CRI
Elpida Memory, Inc.                            Elpida
Freescale Semiconductor Inc.                   Freescale
Fujitsu Limited                                Fujitsu
General Electric Company                       GE
Global Lighting Technologies, Inc.             GLT
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 Electronic Device Engineering Councils   JEDEC
Lighting and Display Technology                LDT
LSI Corporation                                LSI
MediaTek Inc.                                  MediaTek

Micron Technologies, Inc.                          Micron
Mobile Technology Division                         MTD
Nanya Technology Corporation                       Nanya
New Business Group                                 NBG
NEC Electronics Corporation                        NEC
NVIDIA Corporation                                 NVIDIA
Qimonda AG (formerly Infineon's DRAM operations)   Qimonda
Panasonic Corporation                              Panasonic
Renesas Electronics                                Renesas
Samsung Electronics Co., Ltd.                      Samsung
Semiconductor Business Group                       SBG
Sony Computer Electronics                          Sony
Spansion, Inc.                                     Spansion
ST Microelectronics N.V.                           ST Microelectronics
Texas Instruments Inc.                             Texas Instruments
Toshiba Corporation                                Toshiba

Business Overview

We are a premier intellectual property and technology licensing company focusing on the creation, design, development and licensing of patented innovations, technologies and architectures that are foundational to nearly all digital electronics products and systems. Our mission is to continuously enrich the end-user experience of electronic systems through groundbreaking innovations and technologies designed to improve the performance, power efficiency, time-to-market and cost-effectiveness of the products, components and systems offered by market-leading companies in semiconductors, computing, tablets, handheld devices, mobile applications, gaming and graphics, high definition televisions and displays, general lighting, cryptography and data security. Our inventors and engineering teams focus on creating innovations designed to address the most challenging demands of each target market and industry. We believe we have established an unparalleled licensing platform and business model that will continue to foster the development of new foundational technologies. By continuing to build upon this platform, our goal is to create additional licensing opportunities, and thereby perpetuate strong company operating performance and long-term stockholder value.

While we have historically focused our efforts in the development of technologies for electronics memory and chip interfaces, we have been expanding our portfolio of inventions and solutions to address additional markets in lighting, displays, chip and system security, digital media, as well as new areas within the semiconductor industry, such as imaging and non-volatile memory. We intend to continue our growth into new technology fields, consistent with our mission to create great value through our innovations and to make those technologies available through our licensing business model. Key to our efforts, both in our current businesses and in any new area of diversification, will be hiring and retaining world-class inventors, scientists and engineers to lead the development of inventions and technology solutions for these fields of focus, and the management and business support personnel necessary to execute our plans and strategies.

We have two business groups: SBG which focuses on the design, development and licensing of technology that is semiconductor based, and NBG which focuses on the design, development and licensing of technologies for lighting, displays, chip and system security, anti-counterfeiting, digital media and other markets. SBG was considered a reportable segment because it was the only business group that met the quantitative thresholds for disclosure as a reportable segment. As such, segment information is not separately discussed below. For additional information concerning segment reporting, see Note 11, "Business Segments and Major Customers," of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q.

The key elements of our strategy are as follows:

Innovate: Develop and patent our innovative technology to provide fundamental competitive advantage when incorporated into semiconductors and digital electronics products and systems.

Drive Adoption: Communicate the advantages of our patented innovations and technologies to the industry and encourage its adoption through demonstrations and incorporation in the products of select customers.

Monetize: License our patented inventions and technology solutions to customers for use in their semiconductor and system products.

As of June 30, 2012, our semiconductor, lighting, display, security and other technologies are covered by 1,684 U.S. and foreign patents. Additionally, we have 1,264 patent applications pending. Some of the patents and pending patent applications are derived from a common parent patent application or are foreign counterpart patent applications. We have a program to file applications for and obtain patents in the United States and in selected foreign countries where we believe filing for such protection is appropriate and would further our overall business strategy and objectives. In some instances, obtaining appropriate levels of protection may involve prosecuting continuation and counterpart patent applications based on a common parent application. We believe that our patented innovations provide our customers means to achieve improved performance, lower risk, greater cost-effectiveness and other benefits in their products and services.

Our patented inventions and technology solutions are offered to our customers through either a patent license or a solutions license. Our revenues are primarily derived from patent licenses, through which we provide our customers a license to use some specified portion of our broad portfolio of patented inventions. The patent license provides our customers with a defined right to use our patented innovations in the customer's own digital electronics products, systems or services, as applicable. The patent licenses may also define the specific field of use where our customers may use or employ our inventions in their products. Patent license agreements are structured with fixed, variable or a hybrid of fixed and variable royalty payments over certain defined periods.

We also offer our customers solutions licenses to support the implementation and adoption of our technology in their products or services. Our solutions license offerings include a range of solutions developed by Rambus that we provide to our customers under license for incorporation into their digital electronics products and systems. We offer a range of services as part of our solutions licenses which can include know-how and technology transfer, product design and development, system integration, supply chain consulting and other services. These solutions license agreements may have both a fixed price (non-recurring) component and ongoing royalties. Further, under solutions licenses, our customers typically receive licenses to our patents necessary to implement these solutions in their products with specific rights and restrictions to the applicable patents elaborated in their individual contracts with us.

Royalties represent a substantial majority of our total revenue. We derive the majority of our royalty revenue by licensing our broad portfolio of patents to our customers. These licenses may cover part or all of our patent portfolio across our breadth of technologies. Leading semiconductor and system companies such as AMD, Broadcom, Elpida, Freescale, Fujitsu, GE, Intel, Panasonic, Renesas, Samsung and Toshiba have licensed our patents for use in their own products.

We also derive additional revenue by licensing a range of technology solutions to customers for use in their digital electronics products and systems. Our customers include leading companies such as Elpida, GE, IBM, Panasonic, Samsung, Sony and Toshiba. Due to the often 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 semiconductor and system products. Licensees may also receive, in addition to their solutions 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.

The remainder 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 account receivables in any given period.

We intend to continue making significant expenditures associated with engineering, marketing, general and administration including litigation expenses, and expect that these costs and expenses will continue to be a significant percentage of revenue in future periods. Whether such expenses increase or decrease as a percentage of revenue will be substantially dependent upon the rate at which our revenue or expenses change.

Executive Summary

On June 20, 2012, our Board of Directors appointed Dr. Ronald D. Black as our new president and chief executive officer. The hiring of Dr. Black reflects the completion of our search announced in February 2012 for a new chief executive officer, and the retirement of Harold Hughes from the role of president and chief executive officer. Mr. Hughes will continue in his role as a member of our Board of Directors. Also during the second quarter of 2012, we signed a license agreement with Cooper Lighting and completed a stock option exchange program. See Note 5, "Equity Incentive Plans and Stock-Based Compensation," of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for further discussion regarding the stock option exchange program.

Research and development continues to play a key role in our efforts to maintain product innovations. Our engineering expenses in the aggregate for the three months ended June 30, 2012 increased $15.3 million as compared to the same periods in 2011 primarily due to increased headcount related costs of $4.4 million from additional employees to support our development efforts, increased amortization expense related to intangible assets acquired during the past twelve months of $3.8 million and the accrual of retention bonuses related to acquisitions from the past twelve months of $4.1 million. Our engineering expenses in the aggregate for the six months ended June 30, 2012 increased $34.5 million as compared to the same periods in 2011 primarily due to increased headcount related costs of $7.8 million from additional employees to support our development efforts, increased amortization expense related to intangible assets acquired during the past twelve months of $8.8 million and the accrual of retention bonuses related to acquisitions from the past twelve months of $11.0 million.

Marketing, general and administrative expenses in the aggregate decreased $5.5 million for the three months ended June 30, 2012 as compared to the same periods in 2011 primarily due to lower litigation expenses of $7.0 million and lower acquisition diligence costs of $1.7 million, offset by increased headcount related costs of $2.0 million from the increase in employees to support our business and the accrual of the retention bonuses related to acquisitions from the past twelve months of $0.9 million. Marketing, general and administrative expenses in the aggregate decreased $3.5 million for the six months ended June 30, 2012 as compared to the same periods in 2011 primarily due to lower litigation expenses of $12.1 million offset by increased headcount related costs of $3.2 million from the increase in employees to support our business, the accrual of the retention bonuses related to acquisitions from the past twelve months of $2.1 million and increased costs related to sales and marketing events of $1.8 million.

Trends

There are a number of trends that may or will have a material impact on us in the future, including but not limited to, the evolution of memory technology, adoption of LEDs in general lighting, and global economic conditions with the resulting impact on sales of consumer electronic systems.

We have a high degree of revenue concentration, with our top five licensees representing approximately 71% and 72% of our revenue for the three and six months ended June 30, 2012, respectively, as compared to 77% and 75% for the three and six months ended June 30, 2011, respectively. As a result of our settlement with Samsung in 2010, Samsung is expected to account for a significant portion of our ongoing licensing revenue. For the three months ended June 30, 2012, revenue from Samsung accounted for 10% or more of our total revenue. For the six months ended June 30, 2012, revenue from NVIDIA and Samsung each accounted for 10% or more of our total revenue. For the three and six months ended June 30, 2011, revenue from Elpida, NVIDIA and Samsung each accounted for 10% or more of our total revenue. We expect to continue to experience significant revenue concentration for the foreseeable future.

The particular licensees which account for revenue concentration have varied from period to period as a result of the addition of new contracts, expiration of existing contracts, renewals of existing contracts, industry consolidation and the volumes and prices at which the licensees have recently sold licensed semiconductors to system companies. These variations are expected to continue in the foreseeable future.

The semiconductor industry is intensely competitive and highly cyclical, limiting our visibility with respect to future sales. To the extent that macroeconomic fluctuations negatively affect our principal licensees, the demand for our technology may be significantly and adversely impacted and we may experience substantial period-to-period fluctuations in our operating results. In February 2012, Elpida, one of our top 10 licensees by revenue for the past two years, commenced bankruptcy proceedings in Japan as a result of debt loads, competition and declining prices for memory chips, among other reasons which may impact our future revenue. Additionally, our royalty revenue from certain licensees in the DRAM market, such as Samsung and Elpida, are variable and are based on our licensees' revenue two quarters in arrears. As the DRAM market declined in the second half of 2011, our revenue for the six months ended June 30, 2012 was negatively impacted. However, we have begun to see an uptick in DRAM industry in the beginning of 2012 which we expect will have a positive impact to our revenue in the second half of 2012.

The royalties we receive from our semiconductor business are partly a function of the adoption of our technologies by system companies. Many system companies purchase semiconductors containing our technologies from our licensees and do not have a direct contractual relationship with us. Our licensees generally do not provide us with details as to the identity or volume of licensed semiconductors purchased by particular system companies. As a result, we face difficulty in analyzing the extent to which our future revenue will be dependent upon particular system companies. System companies face intense competitive pressure in their markets, which are characterized by extreme volatility, frequent new product introductions and rapidly shifting consumer preferences.

The display industry is intensely competitive and highly cyclical. Since LED backlighting solutions are increasingly pervasive in LCDs for computers, smartphones, tablets, game systems, high definition televisions and any user interface incorporating an active display, the trend towards higher resolution displays across these products requires more LEDs per system. The increased usage of LEDs is thereby creating a need for increased power efficiency since the LED backlight is the primary source of power consumption in many consumer electronics products, including smartphones. Our LDT group has numerous patents in edge lit LED lightguide technology, and we plan to license our technology to key companies that use LED edge lit display products.

The highly fragmented general lighting industry is undergoing a fundamental shift from incandescent technology to cold cathode fluorescent lights and LED driven technology by the need to reduce energy consumption and to comply with government mandates. LED lighting typically saves energy costs as compared to existing installed lighting. Our LDT group's patents in LED edge lit lightguide technology also can be applied in the design of next generation LED lighting products. Our goal is to be a major player in the general lighting industry with our technology, and we have established a technology center in Brecksville, Ohio.

Our revenue from companies headquartered outside of the United States accounted for approximately 73% and 74% of our total revenue for the three and six months ended June 30, 2012, respectively, as compared to 78% for both the three and six months ended June 30, 2011. 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 revenue from international licensees have been denominated in

U.S. dollars. However, to the extent that such licensees' sales to their customers 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.

For additional information concerning international revenue, see Note 11, "Business Segments and Major Customers," of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q.

Engineering costs in the aggregate and as a percentage of revenue increased for the three and six months ended June 30, 2012, as compared to the same periods in the prior year. In the near term, we expect engineering costs to be higher than in 2011 as we intend to continue to make investments in the infrastructure and technologies required to maintain our product innovations in semiconductor, lighting, security and other technologies.

Marketing, general and administrative expenses in the aggregate decreased and as a percentage of revenue increased for the three and six months ended June 30, 2012, as compared to the same periods in the prior year. Historically, we have been involved in litigation stemming from the unlicensed use of our inventions. Our litigation expenses have been high and difficult to predict and future litigation expenses could 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 may not grow or may decrease. 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 to continue to pursue litigation against those companies that have infringed our patented technologies, which in turn will cause litigation expenses to remain significant until such litigation is resolved.

Our continued pursuit of litigation and investment in research and development projects, combined with any lower revenue from our licensees in the future, will negatively affect our cash from operations.

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          Six Months Ended
                                          June 30,                   June 30,
                                     2012          2011         2012          2011
Revenue:
Royalties                               99.1 %        92.1 %       98.9 %        93.4 %
Contract revenue                         0.9 %         7.9 %        1.1 %         6.6 %
Total revenue                          100.0 %       100.0 %      100.0 %       100.0 %
Operating costs and expenses:
Cost of revenue*                        13.1 %         9.2 %       12.2 %         7.2 %
Research and development*               68.2 %        36.5 %       64.4 %        36.8 %
Marketing, general and
administrative*                         57.3 %        57.0 %       56.3 %        54.7 %
Costs of restatement and
related legal activities                 0.1 %         1.1 %        0.1 %         1.5 %
Gain from settlement                       - %           - %          - %        (4.8 )%
Total operating costs and
expenses                               138.7 %       103.8 %      133.0 %        95.4 %
Operating income (loss)                (38.7 )%       (3.8 )%     (33.0 )%        4.6 %
Interest income and other
income (expense), net                    0.2 %         0.2 %        0.2 %         0.2 %
Interest expense                       (12.0 )%       (9.2 )%     (11.2 )%       (9.4 )%
Interest and other income
(expense), net                         (11.8 )%       (9.0 )%     (11.0 )%       (9.2 )%
Loss before income taxes               (50.5 )%      (12.8 )%     (44.0 )%       (4.6 )%
Provision for income taxes               6.8 %         3.2 %        6.5 %         6.9 %
Net loss                               (57.3 )%      (16.0 )%     (50.5 )%      (11.5 )%

Cost of revenue                           0.0 % 0.4 % 0.0 % 0.3 %
Research and development                  4.7 % 3.8 % 4.5 % 3.9 %
Marketing, general and administrative     6.4 % 6.4 % 6.4 % 6.9 %

                           Three Months                        Six Months
                          Ended June 30,     Change in       Ended June 30,     Change in
(Dollars in millions)     2012       2011    Percentage      2012      2011     Percentage
Total Revenue
Royalties               $    55.7   $ 61.0         (8.6 )% $  117.8   $ 120.2         (2.0 )%
Contract revenue              0.5      5.2        (90.6 )%      1.3       8.5        (84.6 )%
Total revenue           $    56.2   $ 66.2        (15.1 )% $  119.1   $ 128.7         (7.5 )%

Royalty Revenue

Patent Licenses

Our patent royalties decreased approximately $4.1 million to $51.2 million for . . .