Apple to Make Own GPU for iPhone; UK Supplier Shares Plunge 70%

UK chip designer Imagination Technologies has seen its shares plunge 70% after news that its biggest customer, Apple, will no longer use the company’s tech for upcoming products.

According to a new report from Reuters, the company confirmed the news in a statement, saying: “Apple has asserted that it has been working on a separate, independent graphics design in order to control its products and will be reducing its future reliance on Imagination’s technology.”

In an obvious attempt to assuage investors, the British firm explained that it “believes that it would be extremely challenging to design a brand new [graphics processing unit] architecture from basics without infringing on its intellectual property rights” and ultimately “does not accept Apple’s assertions.”

Apple paid Imagination license fees and royalties totaling £60.7 million for the year to the end of April 2016, about half of its total revenue, and is expected to pay about £65 million pounds for this year, Imagination said.

Apple has used Imagination’s technology and intellectual property for many years. It has formed the basis of Graphics Processor Units (“GPUs”) in Apple’s phones, tablets, iPods, TVs and watches.

Apple has asserted that it has been working on a separate, independent graphics design in order to control its products and will be reducing its future reliance on Imagination’s technology.

In a press release, the British company noted “Imagination believes that it would be extremely challenging to design a brand new GPU architecture from basics without infringing its intellectual property rights, accordingly Imagination does not accept Apple’s assertions.”

The split also casts major doubts over the future of 1200 Imagination staff. Chief executive Andrew Heath refused to comment on job cuts on a call with analysts today.

World-traveling, tech-savvy, music-producing writer obsessed with all things Apple, video games, and the finer things in life, e.g. mezcal and tacos. When I'm not writing I'm exploring new places, eating new foods, and generally trying to be a decent human.

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