- Micron Technology has agreed to pay Netlist $600 million over five years for a license covering the smaller company’s worldwide patent portfolio, ending pending legal disputes between the two companies.
Micron Technology Inc. (NASDAQ: MU) has agreed to pay Netlist Inc. (OTCQB: NLST) $600 million over five years to resolve their outstanding patent disputes and obtain a license to Netlist’s worldwide patent portfolio, according to the companies’ agreements announced October 6. The deal calls for quarterly payments of $30 million from the fourth quarter of 2026 through the third quarter of 2031.
The settlement ends a legal fight that has stretched across multiple courts and involved memory technologies used in computing products. The five-year patent license agreement gives Micron worldwide, non-exclusive, non-transferable, and non-sublicensable rights to Netlist’s portfolio.
Netlist’s portfolio includes patents covering server DIMMs and High Bandwidth Memory (HBM) technologies, areas that have become increasingly important as AI workloads drive demand for faster and larger memory systems.
Micron and Netlist End Long-Running Patent Fight
The financial terms are structured as 20 quarterly payments rather than a single upfront settlement. At $30 million per quarter, Micron’s payments will total $600 million over the five-year license period. The agreement also includes an equity transaction. Under a securities purchase agreement, Micron agreed to purchase 10 million Netlist shares for $1 million, with the shares subject to transfer and disposition restrictions. The transaction was scheduled to close on or before October 6, according to Netlist’s SEC filing.
The settlement follows a major 2024 jury verdict involving the companies. A jury in the Eastern District of Texas found that certain Micron memory modules infringed two Netlist patents and awarded Netlist $425 million for one patent and $20 million for another, for a combined $445 million. Micron appealed the judgment.
The litigation became more complicated because challenges to the patents were also pursued through the US Patent Trial and Appeal Board. Micron's own regulatory filings said the PTAB had found the asserted claims of the two patents unpatentable, with Netlist appealing those decisions to the Federal Circuit.
The new settlement resolves the pending legal proceedings identified in the agreement rather than leaving those disputes to continue through additional trials and appeals.
The timing is notable because Netlist had only recently escalated another legal action against Micron. On September 29, the company announced a new US International Trade Commission action involving HBM patents used in AI computing, naming Micron along with downstream companies including Nvidia, Broadcom and Google.
That followed a separate ITC investigation instituted in September and an earlier patent complaint filed against Micron in August. Netlist's investor disclosures show how quickly the legal relationship changed from renewed enforcement activity to a broad licensing agreement.
The settlement comes shortly after Netlist reached a separate agreement with Samsung Electronics in August. That arrangement gave Samsung access to Netlist's patent portfolio while including memory-product supply and technology cooperation agreements. Samsung agreed to an upfront license payment of $239 million before applicable withholding taxes and additional quarterly payments under a revenue-based formula.
AI Memory Demand Raises Stakes for Micron
The Micron agreement arrives during a period of exceptionally strong demand for memory used in AI infrastructure. Micron's latest earnings showed how rapidly the market has changed, with the company reporting record fiscal fourth-quarter revenue of $54.23 billion and forecasting fiscal first-quarter 2027 revenue of about $61.5 billion.
Micron has identified HBM as an important part of the AI memory market as data-center operators deploy increasingly powerful accelerators. The company has also been expanding manufacturing capacity and expects memory supply conditions to remain tight through 2027 and 2028, according to its latest outlook.
That broader AI memory demand has made intellectual property surrounding high-performance memory more significant for semiconductor companies and investors.
The development also fits into a wider shift in the AI semiconductor supply chain, where memory manufacturers are becoming increasingly important alongside GPU designers, networking companies and semiconductor foundries.
For Micron, the settlement removes a significant legal dispute while providing continued access to Netlist's patented technologies under a defined five-year license. For Netlist, the agreement creates a scheduled stream of $600 million in license payments while ending the pending litigation identified in the settlement.
The deal does not mean Micron has admitted wrongdoing. The companies agreed to settle and mutually release the pending legal proceedings covered by their agreement, allowing the dispute to end without further litigation over those matters.
With Micron's AI-driven memory business expanding rapidly, the settlement also underscores the increasing commercial value of intellectual property tied to the hardware powering AI systems.