MIPS Technologies' (NASDAQ:MIPS) stock has skyrocketed recently as it lays the groundwork to challenge ARM (NASDAQ:ARMH), the dominant player in cell phone chip design. Savvy investors see the small Silicon Valley company as an emerging threat to ARM, the Cambridge, England firm that licenses the processor designs used in nearly all the leading mobile phones.
MIPS is the top maker of semiconductor designs that are used in routers and home entertainment electronics such as televisions, Blu-Ray players, set-top boxes and DVRs. Cisco (NASDAQ:CSCO) routers, Sony (NYSE:SNE) TVs and Motorola (MOT) set-top boxes all use MIPS processors. Broadcom (BRCM) is MIPS largest customer. NetLogic Microsystems (NASDAQ:NETL) and Cavium Networks (NASDAQ:CAVM), the leading makers of fast growing multicore networking chips, are also key customers.
"Android represents an opportunity that comes around once in a generation," says CEO Sandeep Vij. "We're going to take advantage of it." Vij points out that "with Android, we can bring all of MIPS' architectural advantages to handsets. There was previously a barrier to entry for MIPS in mobile handsets because the operating system was tied to the processor. With Android, that barrier has been removed because applications can run on an Android system regardless of the processor architecture." Vij also notes that Nokia's popular Symbian cell phone operating system never ported to MIPS.
Another major reason why the timing is right for MIPS, says Vij, is the "growth of 4G (fourth generation) cell phones. The 4G processors have more Wi-Fi wireless than 3G processors. MIPS is the number one provider of wireless chip designs for Wi-Fi routers and other devices.
"By using a MIPS processor, we enable cell phone makers to have more processing power in the cell phone chips," says Vij. "MIPS has 32-bit and 64-bit processors. ARM does not have 64-bit. MIPS has single and multithreaded designs. ARM does not have multithreaded," he points out.
A research team at the University of California, San Diego is developing a cell phone chip that dramatically improves power conservation. The prototype chip is called GreenDroid and uses a MIPS processor and the Android operating system.
Vij, 44, recently took over the helm at MIPS. Before taking over at MIPS, Vij was an executive at Cavium.
Vij studied as a graduate student at Stanford University under John Hennessy. Hennessy, who is now the president of Standord, co-founded MIPS Computer Systems, which later became MIPS Technologies.
But MIPS has its eyes on a much bigger prize. The first smart phones with MIPS processors are scheduled to hit the market in early 2011. The popularity of Google's Android mobile phone operating system made it possible for MIPS to enter the cell phone market.