Imagination warns on weak order pipeline

CHIP designer Imagination Technologies said yesterday that volatile economic conditions were leading to delays in the signing of some licences with its semiconductor customers, particularly in Japan.

The company, whose graphics technology is likely to be in Samsung’s new Galaxy S4 smartphone, licenses its technology to semiconductor firms in exchange for a fee as well as royalties on sales.

“The licensing pipeline remains very active, although there are uncertainties over the timing of deal closures, particularly as some semiconductor companies in certain regions are undergoing structural and business changes,” it said in a trading update.

The company did not give details on the number of affected deals, or the likely delay.

The group said it expected continued strong growth in unit volumes, driven by new smartphones and tablets, as well as internet-connected televisions from LG and Sony.

It also said its graphics technology was in Samsung’s high-end Exynos 5410 chip, the processor that industry watchers say will power the South Korean company’s flagship Galaxy S4 smartphone that launches tomorrow.

Imagination, which also counts Apple among its customers, said its royalty revenues remained in line with its expectations, and it was confident its partners would ship more than 500m chips in the current financial year to end-April.

Shares in Imagination Technologies, which have risen 34 per cent since the start of 2013, closed up 1.32 per cent at 537p last night.