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Rambus Inc. (RMBS) has developed and patented a variety of semiconductor-based technologies since its conception in 1990. Its products are licensed to some of the largest digital electronics manufacturers in the world, including Cooper Lighting, IBM (IBM - Free IBM Stock Report), Panasonic (PC), Samsung, Sony (SNE), and Toshiba. As of late, however, the company has been underperforming on a consistent basis. In fact, only one of the last four years has yielded positive bottom-line results. It is for this reason that management announced in the third quarter of 2012 that it would be adjusting its focus away from higher-margined products to further promote its general lighting solutions.

Now just a few months after this announcement, Rambus is breaking ground with the introduction of its new LED light bulb design. The product is following recent industry trends regarding energy-use reduction and improved performance. Companies such as Philips (PHG), Ecosmart, Utilitech, and Miracle LED have created their own comparable products in recent months. However, the innovative design introduced by Rambus is taking lighting capabilities to a new level. Developers have noted significant benefits in three distinct areas, all of which are related to its structural design.

The most prominent of these design improvements is the leveraging of the company’s patented MicroLens optics system to offer an energy-efficient lighting distribution. The MicroLens is a three-dimensional lens, which grants users control over light ray angles that were previously unattainable. This can be harnessed for a number of applications. In the case of Rambus, its presence reduces energy requirements, as light bulb fixtures that use it no longer require a diffuser to distribute light. Too, the strategic placement of these lenses allows for the bulb to emit an even, spherical light source, regardless of the size, shape, or density of the bulb.

Another new feature is its innovative thermal positioning. The bulb, itself, has an open cylindrical design, which allows cool air to flow freely through the center of the bulb. Developers refer to this as the “chimney” effect. When the active bulb maintains a lower core temperature, the LEDs can maintain a longer life. Moreover, the LEDs required to produce this product are fewer in number, necessitating less overhead cost than other LED bulb manufacturers, which can be passed on to the consumer. All told, the product has the ability to reduce energy consumption by about 75%, while simultaneously improving its lifespan by about twenty-five fold.

After its launch, Rambus announced it would be entering into a business alliance with Elitegroup Computer Systems, a designer and distributor of home goods and lighting products. Elite group will be largely targeting sales markets in North America in the early phases of its campaign, including much of its current retail customer base. For now, the alliance is preparing for this product to present itself on the market by the second quarter of 2013. Of course, where exactly it will appear is a mystery at this point in time.

This new development may not change the face of the organization, but it will likely provide a boost to the top line. On a comparative basis, the new bulb outperforms industry competitors by a fairly significant margin. Moreover, the fact that the product does not require Rambus to sacrifice low cost for high quality augurs well for its demand in North America. We expect the semiconductor industry will continue to face headwinds in 2013. As a result, estimating early returns for this product would be most accurately performed by tracking Elite Group’s current customers and understanding the market position of retail stores in which it will be sold. In the Interim, look for Rambus’ recently expanded research and development division to continue to target lighting solutions for new and innovative products.

At the time of this article’s writing, the author did not have any positions in any of the companies mentioned.