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Imagination, supplier of Apple chip tech, to buy MIPS

Imagination, a leading supplier of graphics chips for smartphones and tablets, will buy MIPS Technologies.

Imagination, a key supplier of Apple chip technology, will buy MIPS, one of the oldest names in the silicon business.

U.K.-based Imagination Technologies, a major supplier of graphics chips, will buy the operating business of MIPS Technologies, a vendor of power-efficient chips used in routers, set-top boxes, and game machines.

With the deal, valued at $60 million, Imagination will get 82 "key" patents that are "directly relevant to the MIPS architecture" and comprehensive license rights to all of the remaining 498 MIPS' patents, for a total of 580 patents.

Imagination, known primarily as a graphics processing unit (GPU) supplier, will gain access to MIPS central processing unit (CPU) technology, allowing it to take on ARM, the world leader in smartphone CPUs.

"MIPS is the company that pioneered the RISC CPU architecture," Imagination CEO Hossein Yassaie said in a statement. "I believe that the combination of our existing...CPU technologies...with MIPS' capabilities will help us to create a new force to be reckoned with in the CPU IP market," he added.

MIPS is one of the most venerable names in the chip industry, and its silicon has been used in the Sony PlayStation Portable series, Windows CE devices, TV set-top boxes from Motorola, and network routers from Cisco.

Microsoft's Windows NT, released in 1993, was originally designed to run on MIPS processors, as well as other chip architectures.

Approximately 700 million chips based on MIPS technology were shipped worldwide in the fiscal year that ended in June. That generated about $60 million in revenue, resulting in a loss of about $9 million for the company.

Imagination has become a power in its own right. The graphics silicon used in the iPhone 5 and iPad 4 use Imagination's technology and Intel has tapped Imagination's graphics for its Clover Trail system-on-a-chip being used by Hewlett-Packard, Dell, Lenovo, and others in Windows 8 tablets.

The fourth-gen iPad sports a quad-core graphics chip that uses Imagination technology.
The fourth-gen iPad sports a quad-core graphics chip that uses Imagination technology. CNET

Separately, ARM said it will lead a consortium, Bridge Crossing, that will buy the rights to the MIPS portfolio of 498 patents.

The consortium will pay $350 million to purchase the rights to the patents, of which ARM will contribute $167.5 million.

So, both MIPS and the consortium will have the rights to use all 580 patents.