ARM Holdings and Imagination Technologies are divvying up longtime mobile chip designer MIPS Technologies in a move that will bolster each company’s capabilities in the increasingly competitive space.
Imagination will buy the business of MIPS and 82 of the patents to its MIPS architecture for about $60 million. The acquisition will enable Imagination, which is known for its graphics core technology found in various mobile chips, to become a larger player in CPU development and licensing, bringing it into closer competition with ARM.
“I believe that the combination of our existing Meta CPU technologies and activities with MIPS’ capabilities will help us to create a new force to be reckoned with in the CPU IP market,” Imagination CEO Hossein Yassaie said in a statement. “I am confident the acquisition will accelerate our growth in the substantial CPU IP market across many segments. We have been working closely with MIPS for several years now and have a number of mutual customers and partners. I believe that this transaction will be welcomed by both companies’ customers and the electronics industry at large.”
Meanwhile, ARM—whose low-power chip designs can be found in most smartphones and tablets—is a key member of Bridge Crossing, a consortium of tech companies that is buying the rights to 580 patents and patent applications in MIPS’ portfolio that touch on microprocessors and system-on-a-chip (SoC) design and related technologies. The Bridge Crossing consortium will pay $350 million for the patents, with ARM putting up $167.5 million of that.
ARM officials said having the rights to the patents will enable continued SoC innovation without the threat of litigation around the MIPS patents. The members of Bridge Crossing will make licenses to the patents available to nonmembers. Bridge Crossing represents tech companies in the Allied Security Trust consortium, including Avaya, Hewlett-Packard, IBM, Intel, Oracle and Research In Motion, according to ARM.
“ARM is a leading participant in this consortium, which presents an opportunity for companies to neutralize any potential infringement risk from these patents in the further development of advanced embedded technology,” said Warren East, CEO of ARM. “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 expects the deal for MIPS’ patents to close in the first quarter of 2013.
The mobile chip business is getting increasingly competitive as the use of devices like smartphones and tablets continues to grow. Currently ARM is the dominant player in the space, but other chip makers are looking to gain traction in the market. Most significant is Intel, which is pushing its low-power Core and Atom x86-based platforms as alternatives to ARM, particularly for devices that run Microsoft’s new Windows 8 operating system.
Intel has a few smartphone design wins from device vendors like Orange and Lenovo, and is expecting a number of tablet design wins from its Atom Z2760 Clover Trail chips.
However, AMD also is growing its partnership with ARM. Earlier this year, AMD said it would integrate ARM’s Cortex-A5 processor with TrustZone security technology into future accelerated processing units (APUs), and also is planning to design ARM-based Opteron server chips starting in 2014.
ARM also got a boost Nov. 6 when reports circulated that Apple officials were considering switching from Intel processors to ARM chips for their popular Mac desktops and notebooks. Apple already uses ARM-based chips for its iPhone and iPad devices.