The Chinese Buyout of Imagination Is Bad News for Qualcomm

Imagination Technologies, which once supplied Apple (NASDAQ: AAPL) with GPU designs, recently agreed to sell itself to Canyon Bridge, a Silicon Valley-based private equity firm backed by the state-owned Chinese fund Yitai Capital. Canyon Bridge will pay 550 million pounds ($743 million) for the U.K.-based chip designer.

The sale might seem unremarkable, but it might send ripples across the market that could hurt Qualcomm (NASDAQ: QCOM), the biggest mobile chipmaker in the world. To understand how this could happen, we should take a closer look at Imagination and how its technologies could help Chinese chipmakers gain the upper hand in the chipmaking market.

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Source: Fool.com