Apple increases stake in UK chip manufacturer Imagination

Last December Apple bought a 3.6 per cent stake in Hertfordshire-based chip manufacturer Imagination Technologies, which it currently licenses technology from for the iPhone and iPhone 3GS.

The iPod giant is now set to up its interests in Imagination to 9.5 per cent, for a total cost of around £3.14 million, according to MocoNews.

Imagination develops custom technologies for use in DAB digital radio, mobile and similar electronic systems, which it then licenses to its clients for use in their own devices.

Although the company has a large client roster, it seems Apple is becoming one of its largest customers, and has shown serious interest in getting into the chip design and manufacturing business itself.

There's every chance Apple might attempt to achieve this through acquisition of existing silicon-smiths, which could deliver a damaging blow to Imagination's other clients should it happen.