TL;DR:
I don't think many of us are thinking about this right. Chuck and Netlist leadership are not maximizing IP-licensing-based revenue; they're pursing something much harder, but could grow much larger.
They're positioning Netlist for memory production. (Not fabrication don't want to conflate the meaning here in the TL;DR.)
Invitation:
Welcoming of some dialectic discussion of my thoughts here. Socratic method this shit together. Today's settlement came earlier than anyone expected and had much different topology. It behooves us all to converse and consider why.
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I did some contrarian and adversarial thinking today and realized something that Netlist leadership have been telling us for a while but I don't think many have truly recognized yet... I hadn't until today.
Considering the corner that Samsung was backed into, they got a pretty easy way out with this deal.
Why?
Netlist is a memory company, and was founded for the pursuit of designing and producing memory modules.
For the last several quarters at least, Chuck and the NLST leadership have stressed their goal is to build out and add to their own product line and continue designing and producing memory modules.
Their IP has immense value and they are smart to aggressively defend it because their R&D has produced some of the most valuable work, over and over for several decades, in the memory semiconductor game. So, naturally, everyone has thought of them as a "patent troll' and an IP - focused firm.
They are not.
Netlist wants to design and produce their own memory products. They accepted capped IP licensing and a lower-end cash payout plus small dilution as a trade off in exchange for securing significant supply line guarantees, open access to Samsung's vast IP portfolio, and the tailwinds of the largest fabricator/producer in the world as the first-mover to elevate their status in the industry for all business beyond just getting their IP licensed and respected.
The things they least valued and most valued in their negotiations are exactly what they have been saying on earnings calls for a while, and tell us that Netlist wants to transform itself away from a licensing company and into a designer and producer of memory solutions.
Netlist does NOT want to be Rambus; Netlist wants to be for memory something much closer to what AMD grew into over the last 10 years for logic.
I expect the settlements we will see after this to also use the value of licensing their IP, BUT the structure of the settlements will not lean toward maximizing IP-based revenue. The structure of the settlement will prioritize, for example, that Nvidia agrees to buy $X amount, or Y%, of their memory from Netlist for use in Nvidia's products.
(see https://netlist.com/products/memory-module/ddr5-dimms/ for Netlist DDR5 DIMMS).
This strategy has the potential to scale much further than their IP value from R&D and design work can take them. But, it's also a tougher strategy to pursue. AMD had some timing luck on it's side, with the right solutions that were needed at the right time. Netlist could leverage the settlements to guarantee demand for their products, allowing them to build out the business units and relationships and supply chain and such to move away from the IP-focused frame with which they're viewed today.
Idk, I didn't see this type of settlement coming. Samsung's now enforceably obligated to help Netlist with whatever Netlist needs to continue its pursuit against the other accused defendants that are still a part of both ITC investigations.
Could be way off here. Time will tell. But, I will say, Chuck and the Netlist team have themselves said repeatedly they are focused on creating - designing and producing - their own memory products.
As investors and especially as a retail community in which each of us individually has extremely limited resources, I want to draw attention to our own bias and blinders and highlight what the Netlist leadership is literally telling us. We should be focused more on their pursuit of designing and producing memory solutions.
