News could cost UK firm £10 million
Shares in British chip designer Imagination Technology will be closely watched today [27th September 2012] having had 10 per cent wiped off their value after key partner Texas Instruments revealed it’s to stop making chips for smartphones and tablets.
Analysts are already warning Imagination’s shares could take a further hit when trading opens in London, with shares in fellow UK processor designer ARM also suffering from the news.
One of of the giants of processing and still the second largest US chip maker by revenues, Texas is now thought to be pulling out of the mobile market completely in the face of competition from the likes of Qualcomm and Nvidia.
Kings Langley-based Imagination, which employs 1,200 people, is calculated to derive up to 20 per cent of its royalties from Texas, worth around £10 million a year.
At close last night its shares stood at 470p compared to a high of 717p in April.
The fall wiped out recent gains for the company whose designs can also be found in the core A6 processor chip used in Apple’s latest iPhone 5 smartphone.