NEC will likely offer financial support to MIPS Technologies when Silicon Graphics spins out the chip group and places its bets on processors from Intel, NEC officials familiar with SGI's plans said yesterday.
As part of a briefing on SGI 's strategy scheduled for today, Richard Belluzzo, the new CEO of the company, will announce a licensing agreement with Intel and that SGI plans to spin off MIPS Technologies by June of this year, said the NEC officials. The officials could not disclose details of the licensing agreement.
NEC is an investor in SGI, and is a major maker of chips based on MIPS' designs.
According to a report in yesterday's Wall Street Journal, Intel will allow SGI to add certain graphics capabilities to the Intel-based machines SGI plans to make. SGI was not immediately available to comment.
NEC will likely offer some financial support for the new company, which will keep its current name, officials said. NEC will continue its investment in producing the RISC-based microprocessors at least through 2000, they said.
"We make a lot of MIPS chips so assuring the evolution of the chip is necessary," said NEC president Hisashi Kaneko, in an interview yesterday. Kaneko said that he would like the see the separate company float its stock but would not comment on when he expected that would be.
Kaneko would not comment on the specifics of NEC's "support" but said one option would be for NEC to shift a small stake it holds in SGI over to the new company. Another NEC official, meanwhile, said NEC will invest in the new company.
NEC estimates that it makes over 50 per cent of all MIPS' chips for the embedded market. Current users of the microprocessor include game machine makers Sony and Nintendo as well as several makers of devices based on Microsoft's Windows CE operating system.
As SGI ups its commitment to the Intel platform, Kaneko said he sees MIPS designs pushing deeper into the embedded market.
"Don't just look at the PC market," he said, pointing to the high volumes of game MIPs-based machines currently shipping.