Imagination puts MIPS, Ensigma up for sale

May 04, 2017 //By Peter Clarke
Struggling processor IP licensor Imagination Technologies Group plc has said it intends to sell its MIPS and Ensigma business units and strip back to its strongest business in licensing graphics processing units (GPUs).

However, that strength stood in part on licensing its PowerVR GPUs to Apple and Imagination has been pushed into further turmoil since it announced recently that it had been put on notice that Apple was going to stop paying royalties within 18 months to two years (see Apple dumping GPUs: Imagination in discussions).

Some may say the latest announcement as the beginning of the break-up of what had until recently been a pillar of UK and European technology.

Imagination released a trading update on May 4 for the year to April 30, 2017, saying that talks with Apple had not made satisfactory progress and that it had therefore entered into a dispute resolution procedure with Apple. In the same statement Imagination said it intends to sell its MIPS and Ensigma businesses.

MIPS was acquired by Imagination for $100 million in 2013 just as Imagination was coming under increasing pressure from rival IP licensor ARM, which was able to offer Cortex-A processor plus Mali GPU bundles. However, Imagination's attempt to scale up with PowerVR GPUs and MIPS processors did not yield success leading to a management change and restructuring in 2016 and 2017.

Ensigma is Imagination's home-grown portfolio of communications IP. Imagination had previously said that it would sell its Pure DAB radio business but under the pressure of Apple's intention to stop using and paying for GPU IP more radical steps are being taken.

Ironically the trading update said that the company finished its fiscal year strongly and that the financial results are expected to be line with directors' expectations and reflecting the restructuring implemented over the previous 15 months.

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