Micron settles with Netlist for $600 million, and the toll now falls to Google and Nvidia
Micron will pay Netlist $30 million a quarter through 2031 for the patents underneath AI server memory, the second five-year toll the Irvine patent holder has signed since August. Google and Nvidia, still respondents in Netlist's trade case, fight on.
Vincent Jiang · 3 min read
Netlist, an Irvine, California memory company with 69 employees 2, said on Tuesday that Micron will pay it $30 million every quarter from the fourth quarter of 2026 through the third quarter of 2031 1. The total is $600 million for a five-year license to patents covering server DIMMs and High Bandwidth Memory, the modules AI servers are built on, and it settles every pending case between the two companies 13.
Netlist disclosed the terms in an 8-K filed the same hour 110. Netlist shares surged 18 percent in early Tuesday trading 10, extending a run that has them up more than 600 percent since January 1 2; Micron moved 0.53 percent 8. "The agreement with Micron further validates the value of our AI memory technologies," chief executive C.K. Hong said 1.
Two giants have paid, so the price is public
What Micron bought its way out of had stacked up: a $445 million Texas jury verdict from 2024 that was still on appeal in early September 34, an ITC probe into its DDR5 server memory instituted on September 23 25, and a fresh complaint filed September 29 seeking to block imports of Micron HBM and the Nvidia, Broadcom and Google products built on it 29. The release says nothing about terms beyond the quarterly payments 1.
The pattern matters more. Samsung settled on August 5 for up to $898 million gross over five years, after Texas juries handed Netlist $303 million in 2023 and $118 million in 2024 35. Samsung also signed a cooperation agreement to supply Netlist documents and declarations for its next cases 5. The defendant became the witness.
A rounding error for Micron, a windfall for Netlist
The settled toll outruns the verdicts: $1.5B in licenses against $866M in awards
- Estimate
Data
| Value | |
|---|---|
| Samsung 5-yr license (gross) (estimate) | $898M |
| Micron 5-yr license | $600M |
| Micron verdict, 2024 | $445M |
| Samsung verdicts, 2023 and 2024 | $421M |
Micron earned $59.3 billion of operating profit over the past twelve months at a 65.7 percent margin, its highest in ten years, on $133.2 billion of fiscal 2026 revenue 78. The $120 million a year of license fees is roughly two tenths of one percent of that profit.
Micron's operating margin has swung from minus 37% to 80% in three years
Data
| Operating margin | |
|---|---|
| Q3 '23 | -36.7% |
| Q4 '23 | -23.9% |
| Q1 '24 | 3.3% |
| Q2 '24 | 10.6% |
| Q3 '24 | 19.6% |
| Q4 '24 | 25% |
| Q1 '25 | 22% |
| Q2 '25 | 23.3% |
| Q3 '25 | 32.3% |
| Q4 '25 | 45% |
| Q1 '26 | 67.6% |
| Q2 '26 | 80.4% |
Netlist earned $10.0 million of net income in the entire first half of 2026 and spent $16.8 million on IP legal costs in the second quarter alone; the first $30 million lands this quarter 14. The whole company is capitalized at $2.2 billion, on 349.6 million shares 11. Micron's $600 million and Samsung's $898 million ceiling together are worth about two thirds of that, before a single Google or Nvidia dollar arrives.
The patents can still die
This is a bet on a docket, not an annuity. On September 2 the Federal Circuit let stand a ruling that every challenged claim of Netlist's '339 patent is unpatentable as obvious, and the stock fell 22.26 percent in a day 6. Netlist's own release warns that appeals "could overturn the verdicts or reduce the damages awards," and it still names its litigation with Google as a live risk 1.
What November decides
Netlist posts third-quarter results on November 5 4. On November 23 the ITC holds an evidentiary hearing in the case instituted in July against Samsung, Google, Nvidia, Broadcom and Super Micro; Samsung has since settled 45. Final ITC decisions typically take 12 to 16 months, so any import ban arrives no earlier than late 2027 5. Micron, with more than 75 percent of its 2027 output already committed 8, has bought its exit; Google and Nvidia now choose between the published price and the courtroom.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
