Revenues spike at British chipmaker Imagination despite Beijing ownership row

Simon Beresford-Wylie, the new chief executive of Imagination

Credit: Imagination

Revenues jumped more than 40pc at British chipmaker Imagination Technologies last year even as it was hit with senior executive departures and became embroiled in a high-profile row over its Chinese owners.

Imagination said revenues rose 44pc last year to $125m (£92m), from $87m in 2019, helping the company to swing to a profit. Its adjusted earnings came in at $4m for 2020, compared to a loss of $18m a year earlier.

The company, which makes more than a third of all graphics chips for smartphones and almost half the chips for automotive firms to use in digital dashboards, said investment into its graphics processing units (GPU) helped it to gain "significant traction" in the higher-performance end of the market. 

Simon Beresford-Wylie, Imagination’s chief executive, said: "These initial results represent a notable turnaround compared to 2019 and give us a significant springboard for growth and increased profitability in 2021. 

"The company has proven to be resilient, but this success is driven by its ability to innovate and provide our customers with the building blocks they need to succeed in a wide range of GPU and AI driven markets.”  

The latest results follow a period of significant turmoil for Imagination, in which it lost its chief executive and other senior figures due to growing concern over the influence of its Chinese backers.

Imagination is owned by private equity firm Canyon Bridge, whose largest shareholder is China Reform, a Beijing-backed group. Earlier this year, China Reform was accused of trying to stage a coup of Imagination’s board, ultimately resulting in the departure of then-boss Ron Black and prompting significant scrutiny from MPs.

Concerns centred around the type of technology Imagination develops, which critics said allowed it to identify vulnerabilities in networks and could be used by Beijing. Imagination has maintained that this is purely technology used to check its own systems work.

Following mounting pressure, China Reform pulled back from attempting to add representatives to Imagination’s board, and the chipmaker instead searched for independent non-executives to grow its board. 

However, MPs are understood to still be under some pressure to intervene in the company, given its ties to Beijing.

The Government has recently unveiled a new National Security and Investment Bill, which is currently passing through parliament, and which would give it further powers to intervene in takeovers which are deemed critical to national security.

Imagination’s takeover by Canyon Bridge had faced scrutiny in 2017, but it is thought that the new law, likened to the US’s Cfius approach, will make it much tougher for deals to be approved.