Apple wants to build its own graphics chip for its iOS devices, dumps current chipmaker

Imagination technologies’ PowerVR chips have been a staple of Apple’s iOS devices for years. This will soon change, however, as Apple has announced that it will no longer use
Imagination Technologies’ chips in its devices.

Apple told the chipmaker that it would cease to use Imagination’s graphics technology in about 15 months to 2 years, reports Bloomberg.

Imagination Technologies is a British chip-designer that makes graphics processing units (GPUs) for the Arm platform. Apple has been using these chips for years and as far as investors are concerned, is solely responsible for the company’s revenue and success.

It’s been reported that at least half of Imagination Technologies’ income came from Apple. Shares for the company fell by as much as 69 percent when Apple’s decision was announced. Apple owns an 8 percent stake in the company.

While Apple’s withdrawal will deal a hellish blow to the company, Imagination itself is trying to tone down the announcement. The company claims that there is no way that Apple can go about building a graphics chip on its own without infringing on Imagination Technologies’ patents and intellectual properties. With that in mind, they claim to be in talks with Apple for licensing the requisite patents.

Bloomberg claims that Apple’s royalty fees earned the chipmaker around $76 million last year. In its report, Bloomberg quotes Roger Phillips, an analyst at Investec Securities, who said that the Imagination’s situation is much worse than the loss of revenue from Apple. He tells Bloomberg that the company risks losing its existing customers and acquiring new ones “until the situation with Apple is resolved.”

Another investor is quoted as saying that Imagination is now “uninvestable.”

Apple has been trying to build all its hardware in-house and in fact, the processors used in its iPhones are now custom-built units.