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Apple renews deal with UK chip designer

Hertfordshire-based Imagination Technologies has announced a new agreement with Apple to grant the company access to its IP.

Apple has had a fraught history to date with the chip designer. The company developed GPUs for iPhones and iPads until 2017, when Apple announced that it would end its partnership with the company to focus on developing chips for its products in-house over the next two years; it has since used its own graphics chips in the iPhone X, iPad Pro and Apple Watch.

Apple had been preparing for the switchover, carrying out an alleged “brain drain” of valuable Imagination Technologies employees and establishing a chip development office a few miles from its headquarters.

Apple’s withdrawal hit the company hard, causing its shares to tumble more than 70 per cent, with Apple accounting for most of its revenue at the time. Imagination Technologies attempted a dispute resolution process, arguing that Apple – which had once been poised to acquire the company – had not presented evidence to demonstrate that it was capable of developing its own chips for Apple products without violating Imagination Technologies’ IP.

The company was sold to Chinese government-backed Canyon Bridge Capital Partners just months after Apple’s announcement.

Now, the two companies appear to have partially moved on from the dispute, with Imagination Technologies announcing a “new multi-year licence agreement” to allow Apple access to a range of its IP in exchange for licence fees. It is not known what Imagination IP Apple will be offered.

In July 2019, Apple acquired Intel’s abandoned modem business to help develop chips for its first 5G phones. Without the acquisition, the company would be highly unlikely to have its own 5G modem developed in time for the expected 2020 release.

Apple is gradually working towards developing its own electronics components, with the assumed end goal of providing all the hardware and software used in its devices. It already designs its own processors and last year agreed to acquire part of Dialog Semiconductor for $600m (£480m), gaining access to power-management chips that could help boost iPhone battery performance (which has long contrasted rather poorly with other high-end smartphones). The only major gap in Apple’s hardware portfolio is in memory chips.

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