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Supply Chain Management

Smartphone Slowdown Hurts Loss-making Imagination

12 December 2013

Despite increasing sales and unit shipments processor intellectual property licensor Imagination Technologies Group plc recorded a net loss in the first six months of its financial year to Oct. 31, 2013.

The loss was partly attributable to fall out from the acquisition of MIPS Technology Inc. however the weak outlook for the smartphone sector where Imagination's GPUs play strongly – including inside Apple processors for the iPhone – did not help and Imagination's share price fell by 25 percent to trade at a three-year low.

Imagination (Kings Langley, England) made a net loss of £1.1 million (about $1.8 million) on half-year sales of £85.2 million (about $140 million). This compared with a net loss of £1.8 million (about $2.9 million) on sales of £71.9 million (about $112 million) in the previous six months.

While half-year revenues were up 19 percent compared with the first half of the previous financial year, the technology business revenues increased 24 percent to £70.8 million and royalty revenues were up 44 percent to £56.2 million.

Imagination reported that 640 million chips including its IP shipped in the period with MIPS inside 360 million chips and Imagination's previous IP inside 280 million chips up from 237 million in the same period a year before.

"We expect to see continued shipment growth from our partners during the rest of the financial year although at a slightly slower rate than previously seen. Our current estimate for partner chip shipments in FY14 is now a range of 580 to 630 million units, excluding MIPS, with total shipments expected to be around 1.3 billion," said Sir Hossein Yassaie, CEO of Imagination, in a statement.

Yassaie added that Intel and Broadcom are ramping multimedia capable ICs over the next six months that include Imagination IP.

Related links and articles:

www.imgtec.com

News articles:

MediaTek Deploys Cortex-A7 in Octa Chip

Microchip Rolls New Family of MIPS-Based 32-bit MCUs

Imagination Offers 'Raptor' ISP Cores

Imagination's P5600 Avoids Big-Little 'Complexity'



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