ARM and Imagination unite to acquire MIPS

By Graeme Burton
07 Nov 2012 View Comments
Arm Cortex big and little

ARM and Imagination Technologies have united to acquire semiconductor designer MIPS Technologies, with ARM paying the lion's share of the purchase price to snap up MIPS' patent portfolio, while Imagination will acquire MIPS' operational business.

The complex deal is being led by Bridge Crossing, a consortium of major technology companies affiliated with the Allied Security Trust, an intellectual property broker. ARM is one of the biggest members of the consortium, whose aim is to acquire a defensive portfolio of technology patents to prevent them being used as part of a "patent war", similar to the one being waged by Apple in mobile devices.

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"ARM is a leading participant in this consortium [Bridge Crossing LLC], which presents an opportunity for companies to neutralise any potential infringement risk from these patents in the further development of advanced embedded technology," said ARM CEO Warren East in a statement. "Litigation is expensive and time-consuming and, in this case, a collective approach with other major industry players was the best way to remove that risk."

ARM is paying $167.5m (£105m) of the $350m (£219m) purchase price for 580 MIPS patents and patent applications for chip designs and related technology, with Imagination chipping in a further $60m (£37.5m) to take on the operational side of the business, as well as 82 patents. Imagination will gain 160 Sunnyvale, California-based MIPS engineers in the process.

MIPS had hired investment bank Goldman Sachs in April to find a buyer for its business, which has struggled for a number of years as ARM has raced ahead in the market for powerful, yet low-power-consumption microprocessor designs.

"We have been working closely with MIPS for several years now and have a number of mutual customers and partners," said Imagination CEO Hossein Yassaie in a statement. "I believe that this transaction will be welcomed by both companies' customers and the electronics industry."

MIPS was one of the main challengers to ARM in the 1990s and early 2000s after it was spun-out of Silicon Graphics, now called SGI, a maker of high-end workstations. Its microprocessor designs were used in servers from NEC, Pyramid Technology, Siemens Nixdorf and Tandem Computers, as well as the Sony PlayStation 2 and PlayStation Portable. SGI abandoned MIPS for Intel in 2006, though.

MIPS proved popular in Windows CE-based devices in the late-1990s, and has been widely adopted in networking, telecoms, computer printers, digital set-top boxes, digital televisions, and DSL and cable modems. It sold some 700 million designs in its last financial year, but typically turns over less than $15m (£9.4m) per quarter – compared to £144.6m ($227.9m) in ARM's latest quarterly results.

Both ARM and Imagination are UK based. ARM is emerging as a rival to Intel with its low-power-consumption microprocessor designs, which it licenses to partners, who develop the technology for their own uses. It has built up a broad eco-system, based around both its designs and its portfolio of tools.

Imagination Technologies, meanwhile, is best-known for its graphics co-processors based on its PowerVR technology, but also licenses its broader semiconductor intellectual property in a similar model to ARM's.

ARM and Imagination are both rivals and partners – with both companies' products being used on the same silicon by Apple in its A-series line of microprocessors. Apple designers integrate ARM microprocessor designs with Imagination PowerVR graphics intellectual property to create a series of chips that can better handle graphics-intensive applications. 

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