Imagination Technologies headquartered in Hertfordshire, UK is a mature company that specializes in semiconductor manufacturing. As of recently, the organization was one of the Apple’s main suppliers of graphic chips. However, tech giant decided to stop depending on third parties, so it cut collaboration with its British supplier. However, Imagination Technologies can’t let go so easily. Therefore, the company initiated a dispute procedure.
Apple’s Redrawing Announcement Slashed Its Supplier’s Share Price by 70%
Back in November 2008, Imagination Technology was announcing a massive contract with a mysterious yet influential partner. The agreement regarded only high-performance units of PowerVR SGX graphics processor chip. Some time afterward, the secret identity was revealed and it was Apple itself. Since then, the two corporations had a fruitful partnership.
All this came to an end on April 3rd, 2017. This was when Apple decided to put an end on this business connection. This news was enough to slash the share price of Imagination Technologies by as much as 70%. Such a sudden drop in value was due to half of the company’s revenue being dependent on this one big client alone.
Apple plans to cut its strings from third parties and create its own in-house hardware. As such, Imagination Technologies was notified that its biggest client would no longer demand its services in around two years’ time. This news delivered a signal of alert to other Apple suppliers as well.
Imagination Technologies Wants to Strike a Deal with Apple through a Dispute Procedure
However, an end to a nine-year-old collaboration is not going to be as easy as it may sound like. Imagination Technologies claimed back in April that Apple cannot implement this business decision without violating several patents. This is why analysts are expecting legal battles between the two parties.
“Imagination has, therefore, commenced the dispute resolution procedure under the license agreement…”
On Thursday, Imagination Technologies announced that it failed to reach any solution with Apple. This is why the chip maker is going to continue with a dispute procedure. The company hopes to achieve this way a better agreement with its client.
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