Imagination Technologies (ImgTec) announced their intent to acquire Sunnyvale-based MIPS Technologies for $60 million in cash. This price includes the operating business as well as ownership of 82 patents relevant to the MIPS architecture. The 482 remaining patents in the MIPS portfolio have been sold for $350 million to Bridge Crossing LLC, but Imagination Tech retains a royalty-free, perpetual license to them. The acquisition is expected to close in Q1 2013.

The deal brings together 2 of the top 5 semiconductor design IP vendors and strengthens ImgTec's position and opportunities in the TV/set-top-box and networking markets. While ImgTec does have its own embedded Meta 32-bit CPU core, the MIPS cores complement this lineup with the popular 32-bit and 64-bit CPU applications processors.

While the ImgTec acquisition is straightforward, the acquisition of patents by Bridge Crossing LLC seems to be worthy of further analysis. While ImgTec and MIPS don't go into the details of the companies behind Bridge Crossing LLC, ARM has come out with a press release indicating that they are a leading member of the consortium. Out of the $350 million being shelled out, ARM is contributing $167.5 million. Bridge Crossing LLC expects to license out the patents to companies who aren't part of the consortium. The acquisition of the patents by a licensing authority is more of a defensive move to prevent valuable MIPS patents from being picked up by patent trolls. While we don't have the full list of companies behind the LLC, it appears that most of them are affiliated to the Allied Security Trust, whose members include Hewlett-Packard, IBM and Intel.

MIPS has also been making a little bit of headway into the mobile space (mainly in the Chinese market), but this deal cuts down the number of players in the mobile space from three (ARM, Intel and MIPS) to just ARM and Intel now. We usually don't comment too much on the financial aspects of such acquisitions, but it does appear as if ImgTec got itself a good deal in the process.

 

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  • Wolfpup - Wednesday, November 07, 2012 - link

    Yep, I was 90% sure that was them but the article should mention that.

    Also the article doesn't explain WHY this removes MIPS from being a competitor. If anything I'd think it strengthens what the combined company could do if they wanted to. It seems like PowerVR to date has had the best mobile graphics? Certainly competitive, and combined MIPS/PowerVR cores have potential, probably now and certainly going forward.
    Reply
  • Gopi - Tuesday, November 06, 2012 - link

    MIPS is into most of the wireline chips. I am sure this acquisition is a cool one. Can we expect Imagination to make their own Multimedia processors ? or will it remain as a IP supplier alone ? Reply
  • lmcd - Tuesday, November 06, 2012 - link

    Imagination Tech could take over AMD's role Reply
  • lmcd - Tuesday, November 06, 2012 - link

    Seriously, they have crazy graphics IP and now a new architecture with low single-thread abilities. They could easily make an APU (SoC) to rule them all, especially long-term. Still, as Apple's iPad has demonstrated, PowerVR well-implemented and optimized is highly competitive. Reply
  • Urizane - Wednesday, November 07, 2012 - link

    Apple didn't optimize PowerVR graphics, they just put more of it on there than anybody else. SGX 554MP4 means that there are four SGX 554 modules. Reply
  • jjj - Tuesday, November 06, 2012 - link

    "this deal cuts down the number of players in the mobile space from three (ARM, Intel and MIPS) to just ARM and Intel now "
    What makes you say that? If anything it makes MIPS stronger or are you assuming Imagination is ...doing what?Going ARM?
    Reply
  • UpSpin - Tuesday, November 06, 2012 - link

    I agree with you. This deal ups the number of players in the mobile space from two (ARM, Intel) to three (ARM, Intel, MIPS).
    MIPS SoCs were used in some foreign not well known cheap mobile devices already, but their main territory was more in embedded systems, rather than mobile devices.
    Now with ImgTec could push their mobile research a bit further.
    Reply
  • ganeshts - Tuesday, November 06, 2012 - link

    MIPS / ImgTec will find it difficult to get into mobile space as an app processor IP vendor because ARM is well entrenched and, in addition, most of the general patents from MIPS have been taken up by ARM already. Only guarantee is that ARM will not be able to use the patents necessary for it to get into the networking space.

    Do you think ARM would have spent > $150 mn. to enable another vendor to compete with it in the app processor space ? That is not happening, guys :) Only hope for competition is Intel coming up with compelling mobile / smartphone solutions.
    Reply
  • UpSpin - Tuesday, November 06, 2012 - link

    Either you or I have misunderstood the patent thing.
    MIPS 'sold' the patents to a consortium, to which ARM, ImgTec and others have access. "but Imagination Tech retains a royalty-free, perpetual license to them"
    ARM doesn't have exclusive access to those patents. MIPS just can't license them to ARM any longer, but still use them in their own technologies.

    And MIPS is well known in the low cost sector, but because they haven't focused on the high end sector yet. There are many mobiledevices with MIPS SoCs, just low end china stuff at the moment.

    ARM has Cortex + Mali, ready to build for companies like Samsung.
    ImgTec will have MIPS + PowerVR, ready to build for companies like Samsung.

    Or maybe, in the future, if MIPs gets competive in the high end sector Apple will make a huge buyout, and buy ImgTec to switch from Intel and ARM to their own independent designs.
    Reply
  • ganeshts - Tuesday, November 06, 2012 - link

    I hope to revisit this post a couple of years down the line :)

    ImgTec can't go out and say that it will not continue with the mobile app processor aspirations of MIPS right now. Also, all the talk of Android being one of the reasons can also be construed to mean that Android is making its presence felt even in CE devices like STBs (where MIPS has a strong foothold) - and doesn't necessarily have to mean that it is the mobile market focus.

    Another angle that seems to stick out is the fact that ARM, despite being interested and having cash in hand, couldn't have fully bought out MIPS because of anti-trust concerns. An educated guess is that this deal was done with MIPS, ImgTec and ARM / Bridge Crossing LLC sitting together. I pointed out the patents aspect with this in mind.

    My prediction is that ImgTec will continue to serve the Chinese market with the mobile solutions and probably sign up a few more licensees for PowerVR in the process. Of course, networking and STB focus will be enhanced. I would be greatly surprised if they launch a full-out frontal assault in the mobile app processor space against ARM.

    I am looking forward to how this is going to play out.
    Reply

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