Rising from the ashes of a spent corporate strategy, MIPS Technologies Inc. (Mountain View, Calif.) has reemerged as a lean, embedded marketing machine with what looks like a promising future. That's a good place to be during the industry's most important event-this week's Embedded Systems Conference in San Jose, Calif.

In a major sense, the company has come full circle. Founded as an independent vendor of microprocessors in 1984, MIPS was acquired by Silicon Graphics Inc. in 1992. However, the unstoppable advance of Intel's Pentium ultimately forced SGI to pull back from its strategy of high-end graphics systems built solely around the MIPS architecture. This past June, MIPS was spun off into a standalone company and made its initial public stock offering.

Now, John Bourgoin, MIPS chairman and chief executive officer, is hitting the stump to convince the industry that his company is serious about retaking the embedded-CPU high ground.

His first challenge has been financial. MIPS had long been battered by falling prices on the embedded processors sold by its licensees. As a result, royalties earned from those licenses had tumbled. To turn the tide, the company is pulling the plug on that approach.

"Today, over half our royalties are not flat percentages-they're by dollar volume, where we get so many cents per unit sold," explained Bourgoin. "The net effect is that we are buffered to some extent from that downward pricing pressure. The key now is to get more units out there by volume."

Bourgoin's biggest obstacle will be moving a relatively mature architecture into new design areas. One current downside is that MIPS relies too heavily on revenue from use of its chips in the Nintendo gaming systems. Now, the company is looking to new partner Broadcom as a potential opportunity in networking applications such as cable and DSL modems.

MIPS will disclose its embedded-processor road map, with new offerings, at this week's conference. The company is also repositioning itself as an intellectual-property provider of MIPS cores to OEMs designing application-specific devices.

For a reality check on the reconstituted MIPS, I called Paul Zorfass, lead analyst at First Technology Inc. "They are much better positioned as an independent company," he said. "When they were part of SGI, they had a desktop story and an embedded story, and were always a little embarrassed of the latter. Now, they are justifiably proud of their embedded story."

Zorfass believes MIPS is well focused with a strong licensing program. "I expect them to be a contender," he said.