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Could MIPS gain a new lease of life with Chinese backing?

The break-up and sale of Imagination Technologies, in the wake of Apple abandoning its graphics processor design in the iPhone, may result in its MIPS processor gaining a new lease of life in Chinese hands.

UK-based Imagination announced twin deals – selling the main company to Canyon Bridge Capital Partners for $742.5m, and MIPS to Tallwood Venure Capital for $65m (with the former deal being contingent on the latter).

The separate deal for MIPS was assumed to be partly to avoid a review of the Imagination purchase by the Committee on Foreign Investment in the United States (CFIUS), since Canyon Bridge is partly backed by the Chinese government. While CFIUS would have no interest in the core Imagination business, it could be concerned about the intellectual property of MIPS, a US-based subsidiary, falling into Chinese hands.

But there would be good reasons for a Chinese-influenced buyer to see MIPS as the jewel in the crown. Although MIPS’ processor IP has suffered significantly at the hands of ARM in the mobile world, it has been popular in China, where there is always a motivation to reduce reliance on dominant western technologies.

MIPS has secured Chinese partners for its recent ventures into IoT processors and the government recently said it wanted to use the MIPS architecture for all future government-sponsored projects. In 2014, MIPS revealed its first wearables processor unit (WPU) an announced its first licensee in this market, Ingenic Semiconductor of China.

So, the speculation goes, Imagination may have structured its twin agreements to allow Canyon Bridge to access MIPS’ IP without US review (which could have blocked the transaction altogether). Although most of MIPS’ patents were sold in 2013 to Bridge Crossing, a member-based patent holding company led by ARM, all processor-specific patents were sold to Imagination.

Some chip analysts, as reported by EETimes, think that Canyon Bridge – which was recently blocked by the US government from buying Lattice Semiconductor – may be able to secure a perpetual IP licence for MIPS technology from Tallwood once that deal is finalized (hence the contingency).

There may also be other parties interested in buying MIPS, directly or from Tallwood. Those include CEVA, whose previous bid for MIPS, in 2012, was gazumped by Imagination; or Synopsys, which owns yet another processor IP firm, ARC International, and could add MIPS to its portfolio.

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