NEW YORK--Correct us if we’re wrong, but many readers may be writing off MIPS Technologies way too soon.
The fate of MIPS is shaping up as one of the industry’s biggest stories in 2012. The company’s potential sale would have a significant impact on its storied processor IP line, MIPS customers, potential suitors who would either gain access to the processor IP or lose access and, of course, the current MIPS work force.
MIPS has not commented on speculation about a possible sale, and we’ve been unable to confirm that it has retained an investment banker to represent it (the rumor mill says it’s Goldman Sachs). Nevertheless, the question of who might buy MIPS is unavoidable and should be debated considering the broader implications of such a deal.
For one thing, there are enough chip companies -- including Broadcom, Sigma Design, Cavium Networks and others -- whose SoC roadmaps are dependent on MIPS cores. The outlook for MIPS licensees is as muddled as the future of MIPS. Switching to new cores is tricky since it requires an extensive rework of the internal software infrastructure. As one EE Times reader noted: “Current-day SoCs need a fast turnaround time, and the time needed to rework the software / debug with a new processor IP is just not there.”
But some argue that the transition might not be all that traumatic. Gary Mobley, senior research analyst at The Benchmark Co., wrote in his recent research note that “there is evidence that many of MIPS’ long-time licensees such as Sigma Designs and MStar have started to migrate toward ARM cores.”
To close a deal, seller and buyer must first agree on the sale price. MIPS, which has reportedly been shopped around for the last decade, the question of price is a moving target. In assessing the value of MIPS, Mobley wrote that “the wild card is MIPS patents.” He believes MIPS’ patents, “at a minimum,” could be “worth $100 million.” Mobley estimates the liquidation value for MIPS at about $5 per share “based on our best estimate for the present value of the company’s royalty stream, plus cash and certain assets, minus balance sheet and off-balance sheet liabilities.
MIPS understands how to play this game.
J. Scott Gardner, a senior analyst at The Linley Group, said MIPS has had its patent portfolio evaluated and is now included in the Ocean Tomo 300 Patent Index for 2011-2012. Ocean Tomo, an IP merchant bank, developed an “IPQ score” to rate patent assets based on a proprietary statistical methodology. The IPQ score has a median of 100. Patent assets with higher IPQ scores are statistically more likely to generate economic returns, according to the firm. The IPQ score for MIPS is 135 – one of the highest among semiconductor companies listed in the Ocean Tomo 300 list of member companies
The list “includes a lot of very large companies, and the median market cap is over $9 billion,” said Gardner. “MIPS could raise cash without selling the entire company.”
Gardner added that there are “a few scenarios that would really shake up the industry,” including Apple and Google. “Apple has proven the value of complete vertical integration and ecosystem control,” he said.
Others find promise in the emergence of a tighter Google-MIPS relationship. Google has recently decided to include the MIPS architecture as part of its SDK for the next generation of Android, noted Mobley. "This means eventually all future Android applications will run native on MIPS.
In the following pages, EE Times editors weigh in on the debate, sharing their thoughts in the categories of: a few unlikely candidates, best bets and a potential wild card.
Ms. Yoshida - I read through all your articles and it reminds me of "fool me once shame on you, fool me twice shame on me" proverb. MIPS was a good company when founded by the pioneers of computer architecture. It improved the versatility of Intel microprocessors by giving it stiff competition. But now it is in the hands of one of the most incapable management team. But your characterization, "I wouldn't discount Sandeep so quickly either. Much of the difficulties MIPS had gone through are due to what happened even before Sandeep arrived at MIPS. " is terrible. CEO is a total and utter failure. I have seen it first hand. He is off on several vacations and even when around discussion his vacations. Under his leadership, MIPS stock and MIPS is a disaster.
People use other architectures so that they do not have to deal with Intel for non-desktop devices. Intel is smart enough not to have to buy anyone when their margins are so good. If you are not buying MIPS now, why would you buy MIPS from Intel? x86 CISC overtook RISC long ago due to pricing from DEC, Sun, Silicon Graphics and other misdirected (now historical) companies. Intel courted the Asian board manufacturers, the others ate their young.
Why can't the Chinese get MIPS? The DLX/MIPS-I architecture is essentially in the public domain. There is nothing special about the MIPS architecture. Any group can take it and create a chip, like the x86 competitors did a few years ago (TI, ST, IDT, etc). If you want to sell, the ecosystem is important, for in-house use, it does not matter. Power is determined by technology and the number of transistors, not the ISA.
I'll add an observation that a many changes to a License Core, can actually penalize the licensees.
Much of the Cortex M3 business, merely cannibalized ARM7 Microcontrollers - so those ARM7s reached EOL sooner than they would have.
Even the Cortex M3V2 release, devalues those first out the gate, with first Gen M3's - and the Cortex M0+ is another re-spin...
["Good and interesting calls on Microchip and Intel, which we did not include in our runners and riders list.
Perhaps we should have."]
Amazing it never occurred to you ?
If I was Intel, I could buy MIPS, merely to annoy ARM. Intel is already acting as a Fab, so a good question is have they already fabbed the latest MIPS Aptiv cores ? What did the numbers say ?
If I was Microchip, I would buy MIPS to 'secure the road map' and get a design team. They already made the call, to avoid ARM royalties, and the Aptiv cores do fit well.
["But terminating those licensing agreements is not necessarily easily done."]
Who needs to terminate ? You simply let them run their course.
The real issue here is Road maps - the same long-term decision Apple made, in jumping to Intel.
The actual Core matters less and less; what matters more, is engineering reference examples in the latest FAB process.
FABs need choose only one Core to benchmark their latest shrinks, and the natural 'first cab of the rank' is the larger-user-base one.
["Switching to new cores is tricky since it requires an extensive rework of the internal software infrastructure."]
Yes and no.
As a stunning example, note what Apple/Intel did, when they decided Freescale's Road Map, was simply not up to Intel's.
Also note the comment about Google including MIPS, which shows that adding a new core is not as hard as many imagine.
Yes china could leverage the IP the most most likely. But what of the defense products that use MIPs? Is this a security muddled issue also?
Can anybody desribe what is alcking in the MIPs archetechture compared to ARM?
I do not yet understand why they did not improve and what is deficient for their products compared to ARM. How much is hurd mentality and how much is a performance/cost issue?