Chipmaker Imagination Technologies kicks off strategic review

The new chief executive of Imagination Technologies has kicked off a strategic review of the UK chip designer after a period of boardroom upheaval earlier this year prompted the departure of its former head and several top lieutenants.

Simon Beresford-Wylie, a former Nokia executive who most recently ran UK towers company Arqiva, took over as chief executive of the graphics chip specialist three weeks ago.

The review, which aims to bolster the company’s growth in emerging chip technologies such as the open-source Risc-V architecture, begins as the management and ownership of tech companies comes under greater scrutiny in a period of frostier relations with Beijing.

“The company has been wandering a little bit. We need to tighten the focus,” Mr Beresford-Wylie said in an interview with the Financial Times, adding that the review was not targeting cost cuts but looking at the products the group offers. It is hoped it will be completed by the end of the year. “I’m not the Grim Reaper coming with a scythe,” he added.

Imagination was thrown into crisis in April, when the UK government intervened to ward off an attempt to install four directors linked to Chinese state-controlled fund China Reform Holdings, which is an investor in the British chip company’s parent Canyon Bridge.

The upheaval triggered an exodus of company executives, including Ron Black, the then chief executive, who had warned the board move would damage the British company, “perhaps fatally”.

Ray Bingham, chairman of Canyon Bridge, has previously told the FT that Mr Black had become “frustrated” with the pace at which Imagination was investing in developing its technology.

Mr Beresford-Wylie said there had been a “revolving door of CEOs” in recent years and a deeper analysis was needed to justify the “leap of faith” in new technologies.

Imagination, which is based on the site of an old Ovaltine factory in Hertfordshire, has grown from a tiny electronics business into one of the world’s largest developers of graphics technology over the past 20 years.

It counted both Apple and Intel as shareholders when it was a listed company, but its value slumped after it lost a contract as a supplier for the iPhone in 2017. Shortly afterwards, it was bought by the Chinese-backed fund despite a similar deal being blocked in the US on national security grounds.

The value of chip companies has boomed since then and Apple is once again an Imagination customer. Canyon Bridge has said it would consider floating the company and there has been interest from US funds over a potential investment in the business in recent months, according to multiple people with direct knowledge of the situation.

Mr Beresford-Wylie refused to be drawn on any potential ownership changes but said that both Canyon Bridge and China Reform backed his plans to rapidly grow the business, which has not released its accounts for 2019 yet.

“I haven’t come to be an incrementalist here,” he said, pointing to his record at Arqiva, where he made divestments to refocus the business, which was eventually sold to Spanish group Cellnex Telecom in a £2bn deal.

The UK government has been under pressure to take a more proactive approach to the country’s semiconductor sector after the Imagination boardroom drama provoked fears of a technology and jobs transfer to China. Nvidia’s $40bn takeover of Cambridge’s Arm Holdings has also triggered calls to intervene.

Mr Beresford-Wylie said the attempt to appoint the Chinese board members had been “clumsy” and it was important to be “open and transparent” with the government about its plans. “No embarrassment, no surprises.” he said.

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