The chip designer announced three new licensing agreements at the Embedded Systems Conference this week in San Francisco. MIPS has long played second fiddle to ARM Holdings, the creator of processor cores used in a number of handheld computers and cell phones.
The new licensees include Agilent Technologies and Adaptec. The two companies will use 64-bit MIPS processor cores for a range of products.
Agilent, formerly a Hewlett-Packard division, has licensed the MIPS64 20Kc processor core for use in system-on-a-chip processors that will likely show up in consumer electronics.
Adaptec plans to use the MIPS64 5Kc core in future input/output processors for storage systems, the company said.
Mountain View, Calif.-based MIPS also announced that a longtime licensee, Philips Semiconductor, has licensed the SmartMIPS architecture and MIPS32 4KSc core for smart cards. Philips will produce chips for smart cards based on the core, a relatively new effort from MIPS.
MIPS, like ARM and Rambus, is an intellectual-property company. It designs processor cores but does not manufacture them. Instead, it licenses the cores and receives a royalty on each core that a chipmaker, such as Philips, ships.
Products that incorporate MIPS-based chips include Sony's PlayStation 2 game console, Sony's Aibo robot dog, Motorola's digital cable receivers, the Nintendo 64 game console and Cisco Systems routers.
On Thursday, MIPS reported earnings of $8.4 million, or 21 cents per share, for its fiscal third quarter that ended March 31. That compares with $10.3 million, or 26 cents per share, for the same quarter a year earlier. No estimate was available from First Call, which doesn't list any analyst as following the company.
MIPS' revenue came in at $27.8 million for its third quarter, compared with $27 million for the same quarter a year earlier. ARM, which also announced a number of new licenses at the conference this week, maintains a much larger presence in the market. But analysts believe there is room for both companies in the semiconductor market.
"MIPS has had a couple of areas where they've had a reasonable amount of success. One of them is routers," said Steve Cullen, director of semiconductor research at Cahners In-Stat. "However, MIPS has, over the last six months or a year, been trying to sharpen its model a little."
Brian Knowles, vice president of marketing for MIPS, said this translates into getting down to the business of licensing its processor cores to new customers, such as Adaptec.
Even in cases where a company could use a homegrown alternative, he said, "a lot of companies don't see value in designing cores. What they see their value in is developing system-on-chip for targeted products. What they tell us is...they really need to concentrate their value-add on the specific application the chip addresses--not in the processor core."
MIPS now counts more than 40 licensees, including ATI Technologies, Broadcom, LSI Logic, Micron Technology, General Instrument, NEC, Sony, Taiwan Semiconductor Manufacturing, Texas Instruments and Toshiba. About half of these companies have selected MIPS 64-bit cores, company executives said. MIPS signed nine new agreements during the most recent quarter, according to the company.
As companies seek to build higher-performance networking processors or to add features such as multimedia to handhelds and set-top boxes, MIPS said demand for its 64-bit cores is increasing.
This comes in part because 64-bit chips offer higher performance, by doing more work per clock cycle than 32-bit chips. This, for example, leads to higher data rates in networking applications, such as Adaptec's input/output processors.
"In the future, we see 64-bits even in portable applications," Knowles said. "We will have many more (licensee) announcements coming out over the next few months."
But the company acknowledges ARM's strong presence in the 32-bit market.
"There is a lot of volume in the midrange that we are going for that ARM is also going for," Knowles said.
MIPS executives also hinted at a new 32-bit processor core, due out in the next few months. It's possible the new core would help MIPS to wrestle with ARM.
"Sooner or later, they're going to have to come together (and compete directly), but I think they can both have a pretty good run before they hit that," Cullen said.