In a surprising move, UK chip company Imagination Technologies has bought US chip company MIPS Technologies in a deal worth $60 million.

Surprising... you might be thinking?

Well, yes. If only because Imagination - which has Apple and Intel as shareholders - is best known for providing the graphics chips used in all iPhones and iPad, as well as other smartphones and tablets.

MIPS, on the other hand, is CPU-focused, and notably provided chips for PlayStation 2 and the PSP and PS Vita portables. (Incidentally, Imagination also provides the GPU in the Vita.)

More generally, however, MIPS chips are found in set top boxes and smart TVs, running the Android and Linux operating systems

More than 700 million MIPS-designed chips shipped in the past 12 months.

Better together

Hence, the deal sees Imagination expanding its role in the supply chain, competing with market-leading CPU chip company ARM.

Imagination already offers its own integrated Meta SoC processors, which are generally used in consumer electronics such as digital radios.

But buying MIPS will enable Imagination to expand its range of integrated chips which use its CPU and GPU IP. At the moment, the vast majority of Imagination's GPUs are paired with ARM's CPU designs.

Designing everything inhouse should offer significant benefits in terms of chip performance, cost and power consumption.

It's also something ARM has been working on over the past two years, competing with Imagination's PowerVR IP by offering customers its own Mali GPU designs.

All change

As a result of the deal, Imagination Technologies will gain 160 engineers and 82 patents.

MIPS is selling another 498 of its patents to an industry consortium, including ARM, and Imagination will also have access to these.

"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," said Imagination's chief executive Hossein Yassaie.

[source: Reuters]