After failed takeover talks with Apple, Imagination Technologies sells 3% stake to state-owned Chinese company

Tsinghua Unigroup International has purchased a 3 percent stake in Imagination Technologies, the company that builds graphics processors for Apple's custom A-series chips found in the iPhone, iPad and Apple TV.

Apple had been in talks to potentially acquire Imagination, but the iPhone maker ultimately opted not to strike a deal. Following the breakdown in talks, Chinese state-owned company Tsinghua took a 3 percent stake in Imagination as of May 4.

Imagination Technologies has licensed high-performance graphics processor unit (GPU) designs, known as PowerVR graphics series, for use in Apple's A-series dating back to the original iPhone in 2007. Apple licenses the PowerVR series of GPUs and combines them with memory, logic and ARM-based CPU parts on to a single chip called a SoC or system-on-a-chip.

Though Apple and Imagination have worked together closely, a slowdown in smartphone sales has affected the company, prompting layoffs and restructuring earlier this year. By April, Apple was in talks to purchase Imagination, though the deal fell through.

In a rare move, Apple issued a statement admitting it had "some discussions" with Imagination, but that it did not "plan to make an offer for the company at this time." Apple already owns an 8.5 percent stake in the company, more than twice that of Tsinghua's new share.

Tsinghua's purchase translates to 8,370,032 total shares with 3 percent voting rights assigned. The Chinese state-owned company now has a share of Imagination almost equivalent to Intel's 5 percent.

As of December 2015, Imagination Technologies only had five primary investors: Baillie Gifford & Co., M&G Investment Management Ltd., Apple Inc., Newton Investment Management Ltd. and Majedie Asset Management Ltd.

15 Comments

SnRa 65 comments · 8 Years

About 8 years ago

For Imagination Technologies, it might not hurt going deeper into the Chinese market. Various Chinese SoC's use ARM's Mali GPU design, but a PowerVR GPU design can be just as competitive in the Android space, potentially offering higher performance and greater efficiency. In terms of features, recent PowerVR GPU's can also support Android's newest API, Vulkan.

foggyhill 4767 comments · 10 Years

The problem is that the Android market is mostly down market (except for Apple), while they're most lucrative products are up market.

3% is pretty small, so not even sure why this is news.

cpsro 3236 comments · 14 Years

Is 3% enough to get their foot in the door to steal IP?

jameskatt2 722 comments · 16 Years

It would be far better for Apple to buy AMD or nVidia.

redstater 49 comments · 8 Years

foggyhill said:

The problem is that the smartphone market is mostly down market (except for Apple), while they're most lucrative products are up market.

3% is pretty small, so not even sure why this is news.

If by "down market" you mean devices that cost as much as an iPhone's 6 price of $599, that is not true and not even close. LG, HTC, Huawei, Xiaomi, Samsung and others combined sell many tens - well into the hundreds - of millions of their various flagship devices. Except that iPhones do not exclusively cost $599 anymore: the iPhone SE costs $399, similar to the Moto X and the Nexus 5X. So when you consider that the average selling price of an Android phone was $180 last year - and this average was brought down by a flood of cheap devices that sold in Asia, Africa and Latin America - then several hundreds of millions of devices that were $399 and up were among the 1.2 billion Android devices sold last year. Quite naturally, if the iPhone SE has this GPU, then any Android device that is anywhere near its price range - I would say $250 on up - would be a candidate to include this GPU also.

But in any case, the new Android Vulkan API performs just fine on Mali GPUs, so long as they are 600 series or higher (the Mali 880 is the latest and is in the crop of flagship Android phones just released) and Google made a point of ensuring Vulkan performance on both high end and midrange Mali GPUs. So I doubt that Imagination will find very many takers for their products in the Android world, though making attempts to market them probably wouldn't hurt as you never know.