Apple ups its stake in UK chip maker

Apple is increasing its stake in UK computer chip maker Imagination Technologies to 9.5%. Apple, which bought an initial 3.6% stake in the company for almost USD5m at the end of last year, bought the new stake for an undisclosed sum. The move comes only a week after US chip firm Intel upped its 3% stake in Imagination to 16%.

Apple licences Imagination's chips for use in its iPhones. The company's technology is thought to be integral to Apple's plans for new iPhone models. Apple fitted the new iPhone 3G S with the SGX graphic processing unit (GPU) version of Imagination's PowerVR chip, to improve the handset's graphics quality.

Intel's intentions towards the firm are less clear, though it is also likely to be interested in the company's technology. Imagination's expertise in GPUs is thought to be of increasing importance in the chip market as the graphics chips are used to power more functions in consumer PCs.

Troubled Saudi investor Saad Group is understood to be the seller in both deals. Intel's recent purchase of approximately 13% of Imagination from the investors led to now-proven speculation that Apple might also pick up more shares from the same source.

Shares in Imagination rocketed following the Intel sale as markets responded to the possibility of a buyout. However, neither Apple nor Intel is likely to be interested in fully acquiring the company as long as they can gain access to its intellectual property. Intel has flat-out denied any plans for a takeover of Imagination.

Apart from its radio, mobile and system chip-development business, Imagination also owns digital radio maker Pure.