Apple may have to fight China for iPhone graphics chip maker


Loads of people love the iPhone SE's smaller form factor.
China just made a big investment in the company which makes PowerVR graphics chips for iPhones.
Photo: Sam Mills/Cult of Mac

Right now it seems like Apple is set for a collision of sorts with the Chinese government — and things may not be helped by the fact that a state-owned Chinese company just bought a stake in Imagination Technologies, a British chip design company Apple was previously reported as being in “advanced talks” to acquire.

Imagination creates the PowerVR graphics chips Apple uses for its iOS devices. Apple first invested in the company back in 2008 when it bought a 3.6 percent stake, which it later upped to 9.5 percent in 2009. The rumored move to acquire Imagination would enable Apple to bring its GPU design in-house, much like what it has previously done with its internally-developed ARM-based CPU cores.

However, that plan may have been impacted by the decision of China’s well-funded Tsinghua Unigroup to buy a 3 percent stake in the company. Last year, Tsinghua attempted a $23 billion takeover of America’s Micron company, only for this to be blocked by the U.S. government for reasons of national security. A plan to become the controlling shareholder of U.S. computer storage group Western Digital was abandoned for similar reasons.

“Tsinghua’s stake could ignite a sale process as we believe Apple is unlikely to want Imagination’s technology to go to China,” Liberum analyst Eoin Lambe said. Under U.K. law, Apple cannot make a bid on Imagination until September this year.

Although Apple makes many of its products in China — and Tim Cook has previously been outspoken about believing the country will soon overtake the U.S. as Apple’s biggest market — Cupertino-China relations aren’t exactly smooth right now. After Chinese courts stripped Apple of its exclusive iPhone trademark and the government banned Apple from operating its iBooks and iTunes Movies stores in China, Cook is set to visit the country this month for a spot of troubleshooting.

Via: Evening Standard





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