Sunday, May 07, 2017

Imagination to sell off MIPS and ENSIGMA

By Nick Flaherty www.flaherty.co.uk

Imagination technologies has put its MIPS embedded processor and ENSIGMA wireless business units up for sales, marking an end to most of its involvement in the embedded market.

MIPS was bought just over four years ago, replacing the existing in-house embedded processor  technology. However, a turbulent relationship with the US operation and a lack of a clear message for the embedded market  meant that MIPS struggled to compete with ARM despite the strength of its Power VR 3D graphics technology.

A new chief executive and the collapse of its deal with Apple have left Imagination struggling. Selling these units, which work well together, would leave a clearer valuation for the PowerVR business (which would allow a deal with Apple to be done).

"While the Group has continued to invest in its MIPS and Ensigma businesses, it has now decided to actively market these businesses for sale, concentrate its resources on PowerVR, and strengthen Imagination’s balance sheet," said the company.

MIPS is focused on the embedded processor markets, where it has a strong position, and completed a number of deals with major customers during the last financial year. It has continued to see design wins in networking, routers and DTV/STB and has made good progress in the mobile LTE modem and industrial IoT markets.

MIPS also has a growing position in automotive through its relationship with Mobileye (although this is now part of Intel, which is another worry for the new owner, unless that owner is Intel) and is collaborating with a number of OEMs and Tier 1 suppliers.

Ensigma offers leading, comprehensive IP licensing for connectivity in mobile computing, unmanned systems and IoT, with low power capability. Revenues more than doubled in H1 FY17 driven by strong licencing activity. This momentum has been maintained.

MIPS and Ensigma have complementary capabilities in low power, connected devices providing end to end customer solutions with a strong security solution.

With continued investment, the Group considers PowerVR to be well placed in mobile, automotive, digital TV/set top boxes and the rapidly emerging AR/VR market and having the potential to exploit investments for artificial intelligence in the medium-term, says the company, although this sounds more and more like a sales pitch. Imagination says it will continue to make the appropriate investments in the PowerVR business.

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