Apple’s mobile graphics provider Imagination is buying MIPS

Imagination Technologies, a British-based mobile graphics provider, will buy MIPS, a Sunnyvale, California-headquartered semiconductor design company. The transaction, apparently worth a cool $60 million in cash, is expected to close in the first quarter of 2013. It reportedly includes 82 patents related to the MIPS processor architecture.

This development is interesting knowing that both Apple and Intel have ownership stakes in Imagination, whose PowerVR graphics technology powers Apple’s mobile chips used inside iPhones, iPads and iPods…

Imagination’s intent to buy MIPS was first reported by AnandTech.

The firm’s PowerVR graphics technology uses a method of 3D rendering known as tile-based deferred rendering and has proven itself extremely efficient in mobile devices, where graphics performance at low power consumption is important.

Ever since Apple came out with the first iPhone five years ago, the company has been licensing latest iterations of the PowerVR architecture. This GPU IP is what made possible smooth hardware-accelerated 2D and 3D graphics that iOS devices are famous for.

It’s not just Apple: Imagination’s list of PowerVR display intellectual property licensees includes chip makers Texas Instruments and Qualcomm, for example.

In addition to its capable PowerVR graphics IP, this deal brings a new CPU architecture with low single-thread abilities under Imagination’s wings. What the MIPS acquisition also enables are future system-on-a-chip design incorporating PowerVR GPU and MIPS CPU cores.

The Apple-designed A6X processor used in the fourth-gen iPad, with four PowerVR SGX 554MP4 graphics cores licensed from Imagination Technologies.

Since both IPs would come from the same provider, Imagination, such an integrated chip design could easily yield substantial performance benefits. Apple’s mobile chips for iOS devices use CPU technology from ARM Holdings plc, another UK-based semiconductor design company where Apple was an early investor.

Noting that Imagination already has its own embedded Meta 32-bit CPU core, the publication speculates that the MIPS cores “complement this lineup with the popular 32-bit and 64-bit CPU applications processors”.

Another thing to consider, according to AnandTech, is that this deal “cuts down the number of players in the mobile space from three (ARM, Intel and MIPS) to just ARM and Intel now”.

And why’s that important?

Because Bloomberg yesterday reported that Apple’s newly formed Technologies group, under the leadership of SVP Bob Mansfield, is seeking ways to replace Intel chips in Macs with its own processors.

It’s a long-term effort so don’t expect Apple-branded chips in Macs before 2017, Bloomberg reported, adding:

Apple engineers have grown confident that the chip designs used for its mobile devices will one day be powerful enough to run its desktops and laptops, said three people with knowledge of the work, who asked to remain anonymous because the plans are confidential.

So if Apple is confident that its mobile and desktop devices will in a few years time share the same chip designs, maybe Imagination buying MIPS has something to do with Apple’s future plans.

Imagination’s December 2010 acquisition of Caustic Graphics could also be related to Apple’s Intel-free microprocessor future. This San Francisco-based startup makes real-time ray-tracing graphics technology and the obvious Apple link here is the fact that Caustic Graphics was founded by a group of former Apple engineers.

That the iPhone maker currently holds a 9.5 percent stake in Imagination certainly doesn’t hurt either. By the way, Intel in June 2009 upped its ownership stake in Imagination to 16.02 percent.

What’s your read?

What is going on here and what repercussions could Imagination’s MIPS deal have on Apple’s chip plans?