Imagination Technologies

Imagination specializes in multimedia and communications, as well as in data processing and cloud technologies. The range of the company's solutions implemented on silicon chips includes the main operational units necessary to create "systems-on-a-chip," on the basis of which mobile, consumer and integrated electrical equipment is produced. The company's own software developments, infrastructure technologies and system solutions allow customers to enter the market with highly differentiated systems-on-a-chip platforms. Imagination's patents include many of the developments of the world's semiconductor manufacturing leaders, network operators and hardware developers who have created some of the world's most iconic products.

History

2023:20% of employees laid off due to market problems

In mid-November 2023, it became known that the British GPU developer Imagination Technologies is undergoing a restructuring designed to reduce costs and optimize operations. This initiative will reduce headcount by approximately 20%.

Imagination, which signed a key chip supply agreement with Apple in 2020, said it was downsizing due to the complex "business environment." The company was negatively affected by the emerging macroeconomic environment, high inflation and the crisis in the United States. Against this backdrop, Imagination is taking "the steps necessary to adapt to a complex and transformative market."

Imagination Technologies is restructuring

According to Reuters, the upcoming layoffs will affect every division of Imagination. Approximately 130 employees of the company will lose their jobs on a global scale. As of the end of 2022, Imagination had a workforce of about 560. As of November 2023, nothing has been reported about what costs the chip developer expects to incur in connection with the reorganization.

Imagination is owned by private equity fund Canyon Bridge Capital Partners, which is based in Beijing and controlled by the Chinese government. The company took ownership of Canyon Bridge in 2017 after Apple said it would develop its own graphics technology. In September 2023, information appeared that Imagination is considering the possibility of an initial placement of shares on the New York Stock Exchange. According to reports, the company has already filed a corresponding application. Thus, Imagination may go public again after it was delisted from the London Stock Exchange in 2017 as part of a deal with Canyon Bridge.^[1]

2017: Apple will create its GPU

In April 2017, it became known that Apple is going to develop its own GPUs for the iPhone, iPad and other of its devices. They will be used instead of the solutions of the British company Imagination Technologies, which licenses its GPUs for Apple products.

The announcement led to an instant drop in the developer's shares by 69%, according to the Financial Times resource. The last time the value of Imagination was so low during the 2009 crisis. With the current jump, only a 30% collapse in the company's shares is comparable after the break of the "dot-com bubble" in 2000. Imagination has been trading since 1994.

This is not the first such decision by Apple. For example, the company is developing a new chip for the future generation of Mac laptops to reduce its dependence on Intel^[2]

Dialogue with Apple

Apple will scrap its graphics solutions within 15 months to 2 years, according to Imagination. Apple itself reported its decision to a British partner but offered no evidence that its own developments would not violate Imagination's patents or confidentiality arrangements. The British company believes that developing a GPU from scratch that does not affect its intellectual property will be very difficult. The division of Imagination, which manufactures GPUs for the iPhone, is called Power VR.

The partnership with Apple brings Imagination half of its revenue, as the British developer receives royalties from each device. During the financial year, which ended on 30 April 2016, Imagination received around £60.7m in royalties and licence payments from Apple. The total revenue of the British company in the indicated year amounted to 120 million pounds. In the fiscal year, which ends in April 2017, Apple should receive about 65 million pounds.

2016

In February-March 2016, the vendor announced a reduction in staff by 350 positions and the introduction of other savings measures. The company's difficulties are due to the fact that it is focused on developing GPUs for advanced smartphones, whose sales in the world are gradually falling, according to the Financial Times. Imagination's competitors, like Arm Holdings or Intel, are doing better by diversifying their businesses, in particular, manufacturing components for IoT devices.

2004-2009

From 2004 to 2009, Imagination was a battleground between Apple and Intel. Both companies were increasing their stake in the British vendor, trying to block each other's influence. In 2014, Intel acquired a 9% stake for £20m. Intel's share thus decreased to 4%, while Apple has more than 8% left, which it still owns.

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