Tessera, UTAC sign updated technology licensing agreement

SAN JOSE, USA: Tessera Technologies Inc. announced that its semiconductor packaging subsidiary, Tessera, Inc., has signed an updated technology licensing agreement with United Test and Assembly Center Ltd (UTAC), an independent provider of test and assembly services for a wide range of semiconductor devices.

The initial term of the updated license agreement runs through the end of 2016. UTAC has the option to renew the license for an additional five year term.

Among other consideration to Tessera, under the terms of the agreement UTAC will pay $15.0 million in cash to address past royalties owed under the initial license. Tessera will receive three separate payments, the first of which will occur in the first quarter of 2010 with the remainder in the second half of 2010.

As a result of this initial payment, Tessera is raising its first quarter 2010 total revenue guidance range to be between $63 million and $64 million. This compares to previous first quarter 2010 total revenue guidance given on January 28, 2010, of between $58 million and $61 million.

The updated license agreement and payment for past royalties resolves all outstanding litigation between the companies, settling the parties’ pending action in the Superior Court of the State of California (Alameda County).