Imagination to slim down to graphics core

Hit by the loss of major client Apple, Imagination Technologies plans to sell off its MIPS and Ensigma divisions. The move signals a shift away from previous plans to diversify out from graphics processors.

In a statement to analysts, the company said it has moved to a contractual dispute resolution procedure to try to secure future revenues from Apple. The phone and computer maker decided to drop Imagination entirely from its future lineup of products to focus on an inhouse graphics-acceleration architecture.

Imagination fought off competition from Ceva in late 2012 to buy MIPS Technologies in a $100m deal that also allowed, through an IP trust, competitors such as ARM to secure rights to fundamental processor-architecture technologies that MIPS had patented.

Now, faced with the loss of half its revenues, Imagination has decided to focus its efforts on its traditional business. Imagination claimed MIPS is making headway in automotive projects, assisted by a relationship with Mobileye, the vision-processing company that Intel is in the process of buying.

The Ensigma product line is focused on communications cores and has been part of Imagination since its acquisition of the company in 2000 as part of its drive into digital radio as well as wireless networking. Licensing sales dropped by more than a half from financial year 2015 to 2016, though royalties increased. In 2000, Ensigma saw sales of approximately £1m ($1.5m). Last year, they totalled £3.5m ($5.25m). The MIPS operation saw licensing and royalties fall by 30 per cent and 6 per cent, respectively, from 2015 to 2016.

Last year, the company said it would attempt to sell its IMGworks SoC design-services businesses as well as the Pure consumer products operation.

With its focus now purely on the PowerVR graphics processor family, the company said it has the “potential to exploit investments in artificial intelligence in the medium term”.