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Silicon shakeup: Imagination Technologies buys MIPS, hopes to compete with ARM processors

Silicon shakeup: Imagination Technologies buys MIPS, hopes to compete with ARM processors

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Two companies you've probably never heard of have struck a deal that could help shape the future of the processor industry. Imagination Technologies, whose PowerVR GPUs power every Apple iPad and iPhone, the PlayStation Vita, loads of Intel Atom chips and a great many Android devices as well, has agreed to buy CPU designer MIPS for $60 million. Remember when AMD bought ATI? It's a little bit like that, but for mobile and embedded devices.

Typically, Imagination's graphics are baked into silicon alongside an ARM-based processor, but ARM has been threatening to steal some graphics customers as of late, putting its own Mali GPUs into Samsung products like Google's Nexus 10 tablet. With this deal, Imagination could theoretically compete with ARM on both CPU and GPU fronts simultaneously. At least that's the plan: "The combined business should be able to create a new industry-leading force in CPUs, and essentially will provide choice and an alternative to our good friends in Cambridge," Imagination CEO Hossein Yassaie told Reuters. Specifically, Imagination will launch a series of new processors that MIPS started developing three years ago.

However, competing with ARM on the CPU front won't be as easy as all that. For one thing, Imagination doesn't want to rock the boat. In an analyst presentation, the company promises that no matter where a company buys its CPU, they can still get a GPU "fully supported by Imagination without compromise." Perhaps more importantly, though, ARM is also a beneficiary of the MIPS deal.

For $60 million, Imagination gets MIPS, along with 82 of its patents and rights to the rest, but there are 498 more patents at stake. For $350 million, those are going to Bridge Crossing LLC, a consortium of companies of which ARM is a leading member. ARM is paying $167.5 million of that total to get part ownership and rights to the whole set, which it will share with other affiliated companies. In the end, it sounds like most everyone has what they need to make the most of MIPS' legacy. It's just a matter of seeing which can build the most compelling intellectual property from here on out, and sell it to silicon and device manufacturers. The MIPS deals are expected to close in the first quarter of 2013.