Backbencher Demands Halt Of Chinese Takeover Of Imagination Technologies

A prominent British lawmaker has called on the British government to prevent China from removing the technology base of Imagination Technologies to mainland China.

The British chip designer had placed the ‘for sale’ above its doors in June 2017 after its chip licensing row with Apple a couple of years ago threatened its very survival.

In April 2017 it had been revealed that Apple had planned to stop paying Imagination royalties for the GPU technology used in iPhones, iPads, Apple Watches and other mobile devices. That news crashed the shares in the UK company by 70 percent.

Decline of Imagination

Aside from gaming, GPUs are also useful in computers used for artificial Intelligence and data transfer.

The iPad manufacturer made that move despite the fact that Apple was Imagination’s largest customer, and accounted for around half its annual revenue. It is also an 8 percent shareholder, but had denied any intention to buy the British firm.

Apple even set up an office not far from the Kings Langley headquarters of Imagination Technologies fuelling concerns it was poaching key staff from the British firm. The firm still has 550 staff in the UK.

That Apple dispute took a toll on the chip designer, and in September 2017 it was revealed that Imagination Technologies had been acquired by Chinese-backed private equity firm Canyon Bridge for £550 million.

But this triggered concerns back then, as Canyon Bridge’s main investor is state-backed China Reform Holdings.

Indeed, because of this Canyon Bridge had been blocked by the Trump administration from buying US chip firm Lattice Semiconductor because of national security concerns.

Canyon Bridge had been based in California, and in 2017 then Prime Minister Theresa May approved its acquisition, as she said that Canyon Bridge would be governed by US law.

However, while Canyon Bridge was originally incorporated in the United States, it has since moved its headquarters to the Cayman Islands.

David Davies

Into this argument, British MP David Davis said on Tuesday that the British government should seek every mechanism to prevent the removal of the technology base of Imagination Technologies to China, including seeking a Western buyer for the company.

According to Reuters, Canyon Bridge has tried to wrest control of the group by seeking to appoint board members who will support them, Davis said.

A board meeting, due to take place on Tuesday, was delayed after the British government intervened, the government said.

Ron Black stepped down as CEO, the company said. He has been replaced by Ray Bingham, executive chairman and partner at Canyon Bridge.

A spokesman for Imagination Technologies declined to comment to Reuters.

“What we think is going on is the Chinese are trying to export the technology base from here to China and that’s inappropriate,” Davis told Reuters.

Davis also reportedly said that Imagination was a strategic asset and that the government should make it absolutely plain that it does not view the export of such important British technology with equanimity.

“It should probably try to bring about a purchase of it by somebody else in a Western country,” Davis reportedly said. “The government should be seeking every mechanism available to them to prevent this removal of our technology – full stop.”