Imagination Wins Design Award in Samsung’s New Processors

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Imagination Technologies provided investors with interim comments about its third-quarter results that were relatively in line with analyst’s expectations. Imagination continues to announce meaningful design wins with firms like Samsung and Intel and should see solid revenue growth in the years ahead, as the company’s graphics intellectual property is incorporated into more and more smartphones and tablets.

The firm’s targets of 500 million chip units sold with the firm’s IP in 2013 and 1 billion in 2016 remain on track. The firm also gave preliminary insight into revenue and costs associated with the MIPS acquisition that was also in line with expectations and should make the deal an accretive one for the firm.

The bigger news, comes from the firm’s confirmation that Imagination’s PowerVR core is used in Samsung’s Exynos 5410 Octa processor. Samsung will use this processor in most of its upcoming Galaxy S IV handsets to be launched later this week, which should be a high-volume model that should drive robust revenue for Samsung and, in turn, Imagination.

Samsung’s previous Galaxy S III smartphone used an internal processor, the Exynos 4412, that used ARM’s Mali graphics IP, which was a significant design win for ARM as it strives to gain graphics IP share from Imagination. Samsung’s shift back to Imagination as a good sign that the latter firm’s IP remains at the technological forefront. Further, Imagination’s graphics IP wins into both Samsung’s and Apple’s processors put the firm in an enviable position in what should be the two highest-selling smartphone models in the world in 2013.

Qualcomm’s processors are used in CDMA versions of the S III, and it’s anticipated that Samsung will maintain a similar strategy for the S IV as well. If, by chance, Samsung were to select Qualcomm processors for all of its S IV handsets sold this year, investors could still view Imagination’s position inside the 5410 as an encouraging design win, but a much less important growth driver this year unless the 5410 is designed into other marquee Samsung products, such as future Note phablets or tablets.

 

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