Tessera Technologies Inc., a developer of semiconductor packaging technologies, announced that it has ended a patent dispute with chip maker Micron Technologies Inc. on Friday.

The deal calls for Micron to pay $30 million to get access to Tessera's chip packaging technologies, the housing that puts raw silicon parts into its familiar plastic shape. The deal ends any current standing litigation between the two companies.

The early settlement was likely due to a number of favorable rulings prior to settlement. On July 7th the judged dismissed Micron's motion to disregard anti-trust claims, and furthermore, the judge limited the trial to only ten days - far less time than needed to defend against patent infringement and anti-trust claims.

Analysts believe the micron settlement bodes well for Tessera, increasing the pressure on Infineon who faces a similar trial set for August 14. This also increases the likelihood of settlement with other memory manufactures who are not paying royalties for Double-Data-Rate (DDR) memory, analysts contend. Currently, only Samsung and Hynix are licensees.

Reacting to this news, the San Jose Calif.-based company raised its 2006 revenue outlook to $140 to $142 million, up nearly $22 million from its previous guidance.

Citing a stronger outlook for DDR sales in the second half, and increased potential for royalties, Merrill Lynch's Brett Hodess re-iterated his Buy rating with a $41 price target.

Tessera shares rose a little over 1 percent, or 34 cents in afternoon trading on the Nasdaq stock exchange.

Electronics