Imagination CEO Sees Chance for ‘More Engagement’ With Apple

(Bloomberg) -- Imagination Technologies Group sees a chance for more engagement with its most high-profile customer, Apple Inc., this year as the British chip designer works to move on from a controversy over its ties to China.

The company's new licensing agreement with Apple “certainly opens the door for more engagement with that company,” interim Chief Executive Officer Ray Bingham said in an interview. They announced in January they'd signed a multi-year license deal giving the Silicon Valley company access to a wide-range of Imagination's designs.

Imagination isn't allowed to discuss its relationship with Apple beyond saying the Cupertino, California-based company is a licensee, but news that the computer maker is planning to start making more of its own chips doesn't affect “our relationship with Apple in any negative way,” Bingham said.

Apple has split from chipmaker Intel Corp., deciding to make more of its chips in-house for the next generation of Mac computers. That could open the door for companies that license designs for semiconductors to win new business with Apple.

Imagination's January agreement marked a turnaround from April 2017, when it warned that the U.S. giant would no longer use its technology within 15 months to two years. At the time, Apple accounted for more than half of Imagination's sales, and the announcement lead to a plunge in the U.K. company's stock.

China Row

Imagination was acquired by private equity firm Canyon Bridge Capital Partners for more than 500 million pounds ($616 million) later that year. State-backed China Reform is the firm's primary investor, accounting for 99% of its fund.

Bingham, a partner at Canyon Bridge, is trying to push the company forward after a brief plan to put representatives from China Reform on the board resulted in a backlash and the resignation of Ron Black as CEO of Imagination.

After the proposal was withdrawn, the U.K. Parliament's cross-party Foreign Affairs Committee asked Bingham to appear in May to reassure lawmakers that the move wasn't part of a plan to shift sensitive British technology to China. He said the appointments were meant to help the company increase its customer base in the country.

Imagination is in talks for a new CEO, who will be based in the U.K., and has narrowed the field to three or four candidates, Bingham said. The firm is also in the process of appointing new independent board members, which Bingham promised during his parliamentary appearance, he said.

Chief Technology Officer John Rayfield, who had also resigned during the board nominee row, is still serving out a six-month notice period. But Bingham said he expects Rayfield's resignation to be withdrawn.

Read more: U.K. Chipmaker Said Chinese Investor Pushed for Board Nominees

Imagination still plans to go ahead with expansion plans in China, announcing a deal with Chinese semiconductor company Rockchip this month, and is using its connections at China Reform to open doors with other potential customers, Bingham said.

Licenses for the company's new technology, announced at the end of last year, are driving growth in 2020. The GPUs are attracting customers including carmakers, which use them in entertainment and dashboard systems, as well as those involved in the internet of things. The firm also has a number of licensees for its technology used in laptops and desktop computers.

“Certainly every technology company in the world is trying to penetrate China,” Bingham said. “It's a vast and growing market.” Imagination isn't working on any projects that might touch on national security, he said.

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