Android OS to provide great opportunities in mobile devices for MIPS Technologies, according to the company's President & CEO, Sandeep Vij

Online, August 28, 2010 (Newswire.com) - The mobile arena where there are several entry points including WiFi, applications processors and baseband processors will be a major area of growth for MIPS.

On August 16, 2010 Ken Bloom of Semitrends hosted executives Sandeep Vij, President & CEO, and Maury Austin, CFO of MIPS Technologies in, "A Conversation with SemiTrends."

Mr. Vij started off by telling Ken that MIPS provides semiconductor companies and system OEMs with intellectual property (IP). MIPS Technologies' customers include such blue chip names as Broadcom, Cavium Networks, Microchip Technology, Sony, Toshiba, PMC-Sierra, NetLogic Microsystems, and more than 100 others. MIPS Technologies provides these companies with access to a high-performance, proven embedded processor architecture at a fraction of the cost and faster time-to-market than these customers could develop and maintain internally.

He went on to say that the licenses MIPS grants to its customers range in price from hundreds of thousands of dollars to millions of dollars. Additionally, once the customers begin shipping units utilizing MIPS® embedded processors, they also begin paying MIPS Technologies royalties on each unit shipped for the lifetime of the project. Last year alone, MIPS' customers shipped over 510 million units that included MIPS IP. Over 2 billion MIPS-Based™ devices have shipped worldwide since 2000.

When Mr. Bloom inquired about what has been the biggest surprise in Sandeep's tenure (he joined the company in Jan. 2010), he replied, "How much the entire ecosystem of MIPS wants MIPS to succeed." He went on to tell us that MIPS' customers base their most advanced chips on the MIPS architecture.

Sandeep explained to SemiTrends that MIPS fully expects to continue to be the leader in the digital home in the future. He told us that, "eight of the top thirteen Digital TV semiconductor solutions manufacturers utilize the MIPS solution and there are hundreds of millions of DTVs in service today that have MIPS inside." Additionally, "shipments have increased over 150% in DTV over the past twelve months." In the same time span, the MIPS solutions have grown over 60% in the Set Top Box (STB) market and over 80% in the DVD market due to the expansion of Blu-ray. Another area of focus is the storage controller market where PMC-Sierra has designed MIPS' technology into its line of RAID-on-chip solutions, and that PMC attributes some of the success and differentiation of its chips to MIPS' unique multi-threading capability.

Sandeep went on to articulate that a major area of new growth will be in the mobile arena where there are several entry points including WiFi, applications processors and baseband processors, where MIPS is already reportedly making progress. Mr. Vij further elucidated that the Android™ platform and 4G opportunities have created an inflection point for MIPS Technologies' entry into the mobile handset market.

When Ken asked how 4G and Android create a new opportunity for the MIPS architecture, Mr. Vij explained that previously the barrier to entry for MIPS in mobile handsets was operating system (OS) related and not processor related. The significant thing that occurred in the last year, according to Vij, was the introduction of Android. He explained that Android is platform-agnostic and that MIPS already has over 5500 downloads of the Android on MIPS code from its website. According to Vij, 4G is an opportunity because in the future, these high-bandwidth data networks will be needed to move HD multimedia content rapidly between devices-and this is where the MIPS architecture excels.

Another reason that customers are excited about MIPS, continued Vij, is that MIPS can provide three processor cores in the same die size as two of the competitive cores from its leading competitor ARM. As processors are required to do more and more, this becomes a significant advantage for MIPS. Additionally, Vij believes that the MIPS architecture provides as low or lower power per implementation than the ARM solutions.

When Bloom inquired about how engagements are progressing with mobile customers, Sandeep replied that a number of customers are already designing MIPS into their mobile phone chips. On top of that, they have added an additional mobile customer in each of the past two quarters.

As we wrapped up the call, Bloom asked Mr. Austin about some of the financial metrics. MIPS Technologies has been able to generate significant cash over the past year. Mr. Austin told Bloom that the company generated $21 million in the past year, and almost $9 million last quarter, which allowed MIPS to pay off all of its long term debt. Maury told us that MIPS has huge leverage in its business compared to traditional semiconductor companies. "Our revenues from licenses and royalties are effectively 100% gross margin once we get past $13-$14 million in revenue, so every dollar is effectively incremental operating margin." When asked about the split of business between royalties and licenses, Maury said that, "from a planning perspective, in FY11 we expect about 2/3 of our revenue from royalties and approximately 1/3 from licenses."

About SemiTrends
SemiTrends is a Dallas-based company with worldwide coverage. The mission is to be the leading research provider on short, medium, and long term trends surrounding companies in and related to the semiconductor and greater technology value chains. More information on SemiTrends can be found at www.semitrends.com.

About MIPS Technologies, Inc.
MIPS Technologies, Inc. (NASDAQ: MIPS) is a leading provider of industry-standard processor architectures and cores that power some of the world's most popular products for the home entertainment, communications, networking and portable multimedia markets. These include broadband devices from Linksys, DTVs and digital consumer devices from Sony, DVD recordable devices from Pioneer, digital set-top boxes from Motorola, network routers from Cisco, 32-bit microcontrollers from Microchip Technology and laser printers from Hewlett-Packard. Founded in 1998, MIPS Technologies is headquartered in Sunnyvale, California, with offices worldwide. For more information, contact (408) 530-5000 or visit www.mips.com.

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