Imagination Technologies: Chinese takeaway

At last some succour for shareholders in Imagination Technologies, the UK chipmaker that was kneecapped in April when its “largest customer”, Apple, abruptly ditched a longstanding contract, said Lynsey Barber in City AM. Shares have jumped more than 40% following a £550m takeover bid by private equity firm Canyon Bridge. But all is not as it seems, said Alex Brummer in the Daily Mail. Despite the “Wild West” echoes in its name, Canyon Bridge is actually “something far more sinister”. It is backed by Yitai Capital, a Chinese state vehicle – and was recently blocked from buying a US chipmaker on national security grounds. “America has shown it will not stand for this creeping attempt to open doors to Western secrets. Nor should we.”

Critics of this deal have over-vivid imaginations, said Matthew Vincent in the FT. Imagination’s graphics chips aren’t part of the country’s “essential infrastructure”, and the firm is hardly being “sold off to assetstrippers on the cheap”. Canyon Bridge is paying 72% more than the shares were worth after Apple’s bombshell, and has also promised to keep Imagination’s Hertfordshire operation intact.

“Britain is open for business,” so “we ought not to grumble when our innovative companies are attractive to foreign investors”, said Christopher Williams in The Daily Telegraph. Still, the speed of this “great silicon sale” should give policymakers “pause for thought”. Imagination is the last of Britain’s four major listed chipmakers (after Wolfson, Qualcomm and ARM) to fall prey to foreign buyers since 2014. Our chip industry is in foreign hands, and the chances of rebuilding it “seem as thin as a silicon wafer”. China clearly hopes to become a “global force” in high-end semi-conductors. What is Britain’s plan?