back to article Brit chip design company Imagination Tech sold to China-linked private equity

British chip designer Imagination Technologies Group has sold itself to China-aligned private equity outfit Canyon Bridge. Imagination found itself in trouble earlier this year after Apple warned it would stop using its GPU technology. As Apple accounted for a huge percentage of Imagination's sales, the latter company's share …

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Coat

You'll note no UK investor operation stepped up.

As usual.

But hang on..

If they own the MIPS IP did that mean they did the Intel Management Engine as well?

The one with the "faulty software" that allowed a no password entry and no lockout to the deepest level of control of any Intel processor based server since 2008?

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Intel used ARC

Starting with ME 11, it is based on the Intel Quark x86-based 32-bit CPU and runs the MINIX 3. The ME state is stored in a partition of the SPI flash, using the Embedded Flash File System (EFFS). Previous versions were based on an ARC core, with the Management Engine running the ThreadX RTOS from Express Logic. Versions 1.x to 5.x of the ME used the ARCTangent-A4 (32-bit only instructions) whereas versions 6.x to 8.x used the newer ARCompact (mixed 32- and 16-bit instruction set architecture).

in terms of IP it seems :

During the first quarter of 2013, 498 out of 580 of MIPS patents were sold to Bridge Crossing which was created by Allied Security Trust, with all processor-specific patents and the other parts of the company sold to Imagination Technologies Group. Imagination had outbid Ceva Inc to buy MIPS with an offer of $100 million.

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Anonymous Coward

Balls.

Been watching them for the past few weeks. Knew should of bought some shares before they were sold.

No one in the UK bought them out because they are losing their Apple contract which is their main business so they'll be screwed after that. However, I wonder how the Apple lawsuit they are currently in will now go, the one that they bought against Apple. Now a Chinese company own them, I assume with deep pockets, Apple won't be able to get them to just roll over. The idea going round was, Apple were going to drag it out and then potentially buy them out once their shares tanked even more. Now they won't be able to do that. We will now find out if Apple has managed to create their own graphics chip without any of Imagination's tech or were Apple bluffing to try and get a cheaper contract with them when up for renewal.

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Headmaster

Re: Balls.

"Knew should of bought some shares before they were sold."

...

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Re: Balls.

Apple was rumored to be negotiating with them a couple years ago, but they were unable to reach a deal. Apple never had any interest in buying them, all they might want would be acquiring/licensing IP. If they bought them outright, they'd be responsible for existing customer contracts and support which could run for years. Basically they'd have to keep operating it as an independent company, which isn't what Apple does with its acquisitions.

A Chinese owner would be good news / bad news for Apple. It is good news because Chinese companies almost never fight IP cases off their home turf, so Apple is unlikely to be bothered outside of China. The bad news is that Chinese courts are notorious for enforcing weak cases against foreign companies, so they'd probably lose even if Apple doesn't use Imagination IP (FWIW the hardware capability claims they're making in their developer docs include some that have never been done in Imagination GPUs, so it is by no means certain Apple's new GPU is infringing)

Apple will probably end up having to pay the 'China tax' either by purchasing a perpetual license from the Chinese company for the IP or letting the court dictate things, but most likely they'll be off the hook in the ROW.

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Directors should resign

They allowed their company to become dependent upon one large customer. This should have been ringing alarm bells long ago. Typical that none of the investment houses monitoring the stock shouted a warning either (unless I missed something).

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Re: Directors should resign

It was well known that they were too heavily dependent on Apple but many analysts still thought that a sale to Apple was the most likely outcome.

The purchase of MIPS a few years ago was an attempt to diversify.

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Re: Directors should resign

The purchase of MIPS a few years ago was an attempt to diversify.

And to be fair, with Apple dumping them, far better to have a Chinese investor who stands a much better chance of getting Imagination's IP into the Chinese brands.

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Re: Directors should resign

This is actually a US company buying. Headquartered in Palo Alto, so perhaps no stranger to Big Tech. Just happens to have an office in China, and Chinese investment.

Talking of which, Imagination has long been listed on the London Stock Exchange, which means it's long been open to Chinese investors along with others from around the world.

I wouldn't want to pre-judge whether they'll make a success of it. I took a speculative punt on IMG after the MIPS takeover, but got out at a small profit when it seemed to be going nowhere, and fortunately before the Apple news. Sadly it was never going to be a substitute for ARM after that got borged.

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Re: Directors should resign

Very true - it used to be said you wouldn't get sacked for buying IBM, now it is ARM.

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Anonymous Coward

Re: Directors should resign

Sometimes you have not many choices... sometimes to obtain big contracts you're also forced to not sell the same technology to competitors... without actually knowing what was in the deals, it's hard to know if directors were naive or not.

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Re: Directors should resign

They allowed their company to become dependent upon one large customer.

They may have assumed that they'd pick up another big customer in time. Moreover, I can't imagine that the VC and/or shareholders would be very happy with a company that turns down someone like Apple as a customer.

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Re: Directors should resign

They allowed their company to become dependent upon one large customer.

Seems there are echoes of brexit in everything these days. Is it best to stick with the EU and keep the trade we have with the EU and through EU deals, or better to scrap all that and head for pastures new? Accept what we have, good and bad, or take a gamble, hope it works out better?

What if we stay with the EU and it all turns to shit? What if we leave and that turns to shit?

There are always choices but no one can know what the future holds.

Imagination have probably made the right call given the situation they are in, but that doesn't mean they were wrong to have done what they did.

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Re: Directors should resign

"They allowed their company to become dependent upon one large customer."

That's not great choice.

Say you have turnover over £1m with 10 customers.

Customer 11 comes along and offers a £1b contract. You have to increase staff 90% to cover this.

Do you

a) take on the contract and staff.

b) ignore customer 11 and just carry on.

I've known several companies faced with this sort of scenario and only one went with b...and that's because the Director wanted to keep it in the family and small scale. They also went to the wall when a customer went down. Just having one supplier pull out can kill any company if you are dependent on them due to either their size, or your profit margins.

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"They allowed their company to become dependent upon one large customer. "

Not the first or last company to do that.

I think you'll find Apple (and M & S in UK retail) are quite keen to encourage such dependency.

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Broadcom?

They use MIPS cores in their set top box chips, I wonder how much the license fees are worth.

I worked with some people now at Imagination, hope they do well.

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No tears here.

They were a herd of jerks about IP, not at all Linux friendly. It was all secret sauce and no drivers for people who like to make their own stuff. Wouldn't touch a product with their IP in it with a barge pole, as it is guaranteed to not obey me.

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