Thursday, December 29, 2011

Invensas Purchases 73 MoSys Patents

SANTA CLARA, Calif. & SAN JOSE, Calif.--(BUSINESS WIRE)--MoSys, Inc. (Nasdaq: MOSY) and Invensas Corporation, a wholly owned subsidiary of Tessera Technologies, Inc. (Nasdaq: TSRA), announced today that they entered into a patent purchase agreement. Under the agreement, Invensas purchased 43 United States and 30 foreign memory technology patents from MoSys for $35 million in cash. MoSys retained a royalty-free license to the patents to cover its Bandwidth Engine® product line and technology partners, along with related rights to offer sublicenses to current and future partners.

“The MoSys patents are very relevant to industry-standard DRAM products that have been shipping from the fabs of our potential licensees. The MoSys transaction represents an important milestone in our ongoing acquisition program,” said Simon McElrea, president, Invensas Corporation.

“We are pleased with this transaction as it provides MoSys and its current licensees with continued access to the patents and allows us to strengthen our balance sheet,” stated Len Perham, president and chief executive officer, MoSys. “The combination of the retained license and the non-dilutive source of funding made this transaction very appealing.”

Tuesday, December 20, 2011

Linear Technology acquires Dust Networks

MILPITAS, Calif.--(BUSINESS WIRE)--Linear Technology Corporation (NASDAQ: LLTC), a leader in high performance analog integrated circuits, today announced the acquisition of Dust Networks, Inc., a leading provider of low power wireless sensor network (WSN) technology. The acquisition of Dust Networks, based in Hayward, CA, will enable Linear to offer a complete high performance wireless sensor networking solution. Dust Networks’ low power radio and software technology complements Linear’s strengths in industrial instrumentation, power management and energy harvesting technology.

Dust Networks’ proven, low power wireless sensor network technology extends Linear’s product portfolio into key growth areas in industrial process control, data acquisition and energy harvesting. Dust Networks’ ultralow power wireless systems complements Linear’s analog and digital sensor interface ICs, and energy harvesting power management products in applications where measurement of physical parameters has traditionally been impractical or impossible.

Erik Soule, Vice President of Signal Conditioning and High Frequency products for Linear Technology, stated, “Dust Networks offers the lowest power radio technology and most complete networking software for building industrial-grade wireless sensor networks. Combined with Linear’s precision low-power sensor interface products and battery-free energy harvesting technology, we can now offer the industry’s highest performance remote monitoring solutions.”

With the growing importance of machine-to-machine communications to enable remote data acquisition, low power wireless sensing is an emerging solution for many end-markets, including industrial process control, building automation and data center energy management.

Joy Weiss, President of Dust Networks, stated, “Dust Networks and Linear are an excellent fit. We already have very complementary products and customers, and with Linear’s global sales reach we can be at the forefront, enabling sensor networks to go wireless on an even broader scale.”

“Smart Dust” was first conceived by Dr. Kris Pister, founder and chief technologist of Dust Networks, as a simple way to deploy intelligent wireless sensors. Dust Networks pioneered SmartMesh® networks that comprise a self-forming mesh of nodes, or “motes,” which collect and relay data, and a network manager that monitors and manages network performance and sends data to the host application. This technology is now the basis for a number of seminal networking standards. The hallmark of Dust Networks’ technology is that it combines low power, standards-based radio technology, time diversity, frequency diversity, and physical diversity—to assure reliability, scalability, wire-free power source flexibility, and ease-of-use. All motes in a SmartMesh network—even the routing nodes—are designed to run on batteries for years, allowing the ultimate flexibility in placing sensors exactly where they need to go with low cost “peel and stick” installations.

Dust Networks’ customers range from the world’s largest industrial process automation and control providers such as GE and Emerson, to innovative, green companies such as Vigilent and Streetline Networks. Dust Networks’ technology can be found in a variety of monitoring and control solutions, including data center energy management, renewable energy, remote monitoring, and transportation.

Terms of the transaction were not disclosed. Although there will be some transaction related costs, Dust’s ongoing results are not expected to be material in the short term to Linear’s financial statements.

About Dust Networks

Founded in 2002, Dust Networks is a pioneer in the field of wireless sensor networking, and is defining the way to connect smart devices. Using standards-based network technology, Dust Networks provides reliable, resilient and scalable products with advanced network management and comprehensive security features. Dust’s broad portfolio includes SmartMesh®IP, SmartMesh Industrial/WirelessHART™ and ZigBee®. Dust Networks provides complete wireless systems solutions, including IEEE 802.15.4 mote modules, mote-on-chips and network and security management software and hardware. For more information, visit

About Linear Technology

Linear Technology Corporation, a member of the S&P 500, has been designing, manufacturing and marketing a broad line of high performance analog integrated circuits for major companies worldwide for three decades. The Company’s products provide an essential bridge between our analog world and the digital electronics in communications, networking, industrial, automotive, computer, medical, instrumentation, consumer, and military and aerospace systems. Linear Technology produces power management, data conversion, signal conditioning, RF and interface ICs, and µModule® subsystems. For more information, visit

LT, LTC, LTM, µModule and are registered trademarks of Linear Technology Corp. All other trademarks are the property of their respective owners.

Friday, December 9, 2011

Lattice Semiconductor to Acquire SiliconBlue

HILLSBORO, OR--(Marketwire - Dec 9, 2011) - Lattice Semiconductor Corporation (NASDAQLSCC) today announced it has entered into a definitive agreement to acquire SiliconBlue Technologies, a pioneer and leader in Custom Mobile Device™ solutions for the consumer handheld market. Utilizing a single chip, ultra-low power Field Programmable Gate Array (FPGA) fabric, SiliconBlue's mobileFPGA™ devices enable mobile designers to quickly add features to their mobile platform in areas such as connectivity, memory / storage, sensor management, and video / imaging. SiliconBlue's mobile FPGA devices have already shipped in the millions of units to top tier consumer OEM's.
Under terms of the agreement, Lattice Semiconductor will pay approximately $62 million in cash for SiliconBlue Technologies. The acquisition is subject to standard closing conditions, with a targeted close in the fourth quarter of 2011. Lattice Semiconductor ended the third quarter of 2011 with a cash, cash equivalents and short-term marketable securities balance of $267.2 million.
Darin G. Billerbeck, Lattice Semiconductor's President and Chief Executive Officer, said, "The acquisition of SiliconBlue is aligned with our Strategic Long Range Plan and will help accelerate our growth strategy in the Mobile Consumer market. Silicon Blue will further strengthen our product roadmap by adding a scalable, low cost, low power nonvolatile memory FPGA, along with key personnel and blue chip customers. Kapil Shankar, SiliconBlue's Chief Executive Officer, will join Lattice Semiconductor as Corporate Vice President of the Mobility Business Unit and will be responsible for the Company's mobility product lines."
The mobile consumer market for PLD's includes digital cameras, smartphones, eReaders, tablets, notebooks and netbooks. Key market growth trends include the drive for longer battery life, more natural interfaces, increased functionality, lower cost and reduced weight.
Mr. Shankar commented, "We are excited to be joining the Lattice Semiconductor family. Lattice gives us the global scale, proven market credibility and financial backing to take SiliconBlue to the next phase of its growth. We think our existing customers will immediately benefit from our new global reach and support. We also expect Lattice's added resources and financial strength will give potential new customers confidence in designing in our mobileFPGA solutions as we work to more fully realize the potential of our pioneering technology."
About SiliconBlue:Founded in 2006, privately held SiliconBlue Technologies is the leader in Custom Mobile Device (CMD) solutions, with over 250 active end customers and more than 40 patents. The company offers a total solution for handset applications, including IP, design services and a new class of ultra-low power, single-chip, CMOS SRAM mobileFPGA devices with patented non-volatile configuration memory (NVCM). The company is headquartered in Santa Clara, California, with offices in China, Taiwan, Korea and Japan. SiliconBlue is a privately held company and includes the following investors; BlueRunVentures, Crosslink Capital, NEA, Apex Venture Partners, TSMC and Atlantic Bridge. For more information, please visit our website
About Lattice Semiconductor: Lattice is the source for innovative FPGAPLD, programmable Power Management solutions. For more information, visit Follow Lattice via FacebookRSS and Twitter.

Wednesday, October 26, 2011

PMC-Sierra to acquire RAD3

Calgary, Alberta, October 25, 2011 – RAD3 Communications Inc. (RAD3), a Calgary-based communications intellectual property (IP) company, today announced that it has signed a definitive agreement to be acquired by PMC-Sierra, the semiconductor innovator transforming storage, optical and mobile networks. The team will continue to operate out of its Calgary office.

“We’re excited for our Calgary-based team to be joining an international company of PMC’s caliber,” Roger Bertschmann, president of RAD3. “PMC’s integration and silicon expertise, combined with our leading-edge capability in the design and delivery of communications and storage IP, will enable us to drive industry-changing technologies that transform the network.”

“RAD3’s technologies and highly experienced team are a good fit with PMC,” said Brian Gerson, PMC fellow and vice president of Research and Development. “RAD3’s Forward Error Correction (FEC) and Digital Signal Processing (DSP) technologies will enhance PMC’s ability to offer innovative, high-performance solutions for storage, optical and mobile networks.”

The acquisition is expected to close in November 2011, subject to customary closing conditions.

About RAD3 Communications

RAD3 is a leading supplier of communications intellectual property (IP) for new and emerging wired and wireless communication standards. RAD3’s extensive library of IP solutions enables communication companies to rapidly design and build their products using a suite of industry proven IP. For more information, please visit RAD3’s web site:

About PMC

PMC (Nasdaq:PMCS) is the semiconductor innovator transforming networks that connect, move and store digital content. Building on a track record of technology leadership, we are driving innovation across storage, optical and mobile networks. Our highly integrated solutions increase performance and enable next-generation services to accelerate the network transformation. For more information,

LSI to acquire SandForce

MILPITAS, Calif., October 26, 2011 – LSI Corporation (NYSE: LSI) today announced that it has signed a definitive agreement to acquire SandForce, Inc., the leading provider of flash storage processors for enterprise and client flash solutions and solid state drives (SSDs). Under the agreement, LSI will pay approximately $322 million in cash, net of cash assumed, and assume approximately $48 million of unvested stock options and restricted shares held by SandForce employees.

SandForce’s award-winning products include flash storage processors at the heart of PCIe flash adapters and SSDs. Flash storage processors provide the intelligence required to deliver the performance and low-latency benefits of flash storage in enterprise and client applications. With market-proven, differentiated DuraClass™ technology, SandForce flash storage processors improve the reliability, endurance and power efficiency of flash-based storage solutions.

The acquisition greatly enhances LSI's competitive position in the fast-growing server and storage PCIe flash adapter market, where the WarpDrive™ family of products from LSI already uses SandForce flash storage processors. The complementary combination of LSI’s custom capability and SandForce’s standard product offering propels LSI into an industry-leading position in the rapidly growing, high-volume flash storage processor market space for ultrabook, notebook and enterprise SSD and flash solutions.

“Flash-based solutions are critical for accelerating application performance in servers, storage and client devices,” said Abhi Talwalkar, LSI president and chief executive officer. “Adding SandForce’s technology to LSI’s broad storage portfolio is consistent with our mission to accelerate storage and networking. The acquisition represents a significant, rapidly growing market opportunity for LSI over the next several years.”

Michael Raam, SandForce president and CEO, said, “The combination of SandForce and LSI allows us to deliver differentiated solutions in the PCIe flash adapter segment by tightly integrating flash memory and management. In addition, leveraging our flash storage processors with LSI’s comprehensive IP portfolio and leading-edge silicon design platforms will lead to innovative solutions.”

The transaction is expected to close early in the first quarter of 2012 subject to customary closing conditions and regulatory approvals. Upon closing, the SandForce team will become part of LSI’s newly formed Flash Components Division, with Raam as general manager.

LSI expects the acquisition to be neutral to non-GAAP* earnings per share in 2012. The company will provide further details during its conference call at 2 p.m. PDT today and discuss third quarter results and the fourth quarter 2011 business outlook.

Monday, October 24, 2011

MIPS and Starboard Reach Agreement

SUNNYVALE, Calif., October 24, 2011 – MIPS Technologies, Inc. (NASDAQ: MIPS) (“MIPS” or “the Company”), a leading provider of industry-standard processor architectures and cores for digital home, networking and mobile applications, today announced it has reached an agreement with Starboard Value LP and its affiliates (“Starboard”), which beneficially owns approximately 9.9% of the outstanding shares of MIPS’ common stock. 

Under the agreement, MIPS has agreed to nominate to the MIPS Board two new directors recommended by Starboard, who are not employees of MIPS or Starboard. The nominations will be submitted for stockholder approval at the Company’s 2011 Annual Meeting. One of the new nominees will serve as a Class II director, with a one-year term expiring at MIPS’ 2012 Annual Meeting of Stockholders, and the other new nominee will serve as a Class III director, with a two-year term expiring at MIPS’ 2013 Annual Meeting of Stockholders. With the addition of the two new director nominees, the MIPS Board will be expanded to nine directors, comprised of eight independent directors and Sandeep Vij, MIPS’ President and Chief Executive Officer, effective upon conclusion of the 2011 Annual Meeting.

In connection with the agreement, Starboard has withdrawn its nomination of director candidates to the MIPS Board and has agreed to vote all of its shares in favor of each of the Board’s nominees at the 2011 Annual Meeting, and for each other proposal to come before the 2011 Annual Meeting in accordance with the Board’s recommendation.

“We are pleased to have worked constructively with Starboard to reach this agreement,” said Sandeep Vij, President and Chief Executive Officer of MIPS Technologies. “Our Board and management team are committed to creating value for all MIPS stockholders. We are focused on building upon MIPS’ strong position in the digital home and networking markets, continuing our expansion into mobile, and capitalizing on our robust worldwide patent portfolio. We look forward to benefiting from the collective experience of our two new directors to build an even stronger future for MIPS and our stockholders.”

“We are pleased to have had productive conversations with management and the Board, and believe the two new members of the MIPS Board will each make substantial contributions to the MIPS Board,” said Jeffrey C. Smith, Chief Executive Officer of Starboard. “MIPS has strong customer relationships, a valuable portfolio of patent properties, and a team of talented and dedicated employees. The Company’s technology powers some of the world’s most popular products in its target markets. We look forward to continuing to work constructively with the Company and the Board to help enhance value for all stockholders.”

The Company’s 2011 Annual Meeting has been scheduled for December 7, 2011 at 2:00 p.m. (Pacific Time) at MIPS’ headquarters at 955 East Arques Avenue, Sunnyvale, California  94085. MIPS stockholders of record as of October 11, 2011 will be entitled to notice of and to vote at the Annual Meeting. Further details regarding the 2011 Annual Meeting, including the agreement between MIPS and Starboard, and the two Starboard nominees to be nominated to the Board, will be included in the Company’s definitive proxy materials, which will be filed with the Securities and Exchange Commission (“SEC”).

The complete agreement between MIPS and Starboard will be included as an exhibit to the Company’s Current Report on Form 8-K which will be filed with the SEC.

About MIPS Technologies, Inc.
MIPS Technologies, Inc. (NASDAQ: MIPS) is a leading provider of industry-standard processor architectures and cores for digital home, networking and mobile applications. The MIPS architecture powers some of the world's most popular products, including broadband devices from Linksys, DTVs and digital consumer devices from Sony, DVD recordable devices from Pioneer, digital set-top boxes from Motorola, network routers from Cisco, 32-bit microcontrollers from Microchip Technology and laser printers from Hewlett-Packard. Founded in 1998, MIPS Technologies is headquartered in Sunnyvale, California, with offices worldwide. For more information, contact (408) 530-5000 or visit

About Starboard Value
Starboard Value is a New York-based investment adviser with a focused and differentiated fundamental approach to investing in publicly traded US small cap companies. The investment team has a successful track record of generating significant alpha for investors using their expertise in shareholder activism.

Thursday, September 29, 2011

Atmel to Acquire ADD Semiconductor

SAN JOSE, Calif., Sept. 27, 2011 /PRNewswire/ -- Atmel® Corporation (Nasdaq: ATML) today announced that it has signed a definitive agreement to acquire Advanced Digital Design, S.A. ("ADD Semiconductor"), a privately held company based in Zaragoza, Spain that develops power line communication solutions. The transaction is subject to customary closing conditions and is expected to close in October. Atmel does not expect the acquisition to have a material impact on its overall financial position and results of operations in 2011. 

ADD Semiconductor, a founding member of the PRIME Alliance, specializes in the design of system-on-chip solutions that allow for narrow-band data communication across existing electric power lines. In addition to successfully supporting a number of advanced meter infrastructure ("AMI") pilots in Europe, ADD Semiconductor products are also targeted towards the lighting, building automation and solar infrastructure markets. 

With ADD Semiconductor, Atmel will acquire a portfolio of innovative products and a team of technical experts focused on signal processing and power line communications. This acquisition complements Atmel's existing smart energy product portfolio, better positioning the company for continued success in the growing smart meter, energy management, home and building automation markets.

Monday, September 26, 2011

Entropic invests $10M in Zenverge

SAN DIEGO, Sept. 26, 2011 (GLOBE NEWSWIRE) -- Entropic Communications, Inc. (Nasdaq:ENTR), a leading provider of silicon and software solutions to enable connected home entertainment and Zenverge, Inc., a leading developer of advanced media integrated circuits (ICs) for the connected home, today announced a strategic partnership to co-develop solutions and align product roadmaps for the delivery of content with powerful transcoding technology over a MoCA® 2.0 (Multimedia over Coax) home network. In addition, Entropic has made an investment in Zenverge totaling 10 million dollars (USD).

Service providers are seeking cost-effective ways to broaden delivery of video content beyond TVs, to portable display devices like tablets, smartphones, and laptops. Building on the partnership between the two companies announced earlier this year, a combined Entropic-Zenverge solution will enable service providers to leverage their investment in MoCA networks and the paradigm shift to IP content, to significantly expand the number and types of display devices on which their subscribers can consume content, while maintaining superior quality, security and market leading MoCA home network connectivity. With faster than real-time high definition (HD) transcoding from Zenverge and unsurpassed MoCA 2.0 performance from Entropic, pay-TV, over-the-top or personal video content can be streamed from a DVR, a network attached storage (NAS) device, or a personal computer (PC) and converted to a format most suitable for viewing on tablets, smartphones, or laptops. This content can either be watched immediately in a connected mode, or later from content stored locally.

The product roadmap alignment between the companies integrates the following features and attributes of each company to ensure a superb, seamless content viewing experience throughout the home and on any device:
  • Zenverge's Entertainment Nexus (ZEN) advanced architecture for HD media processing. This powerful architecture results in a high-performance, low-latency, lower power digital media processor capable of transcoding HD content up to four-times faster than real-time, and up to 30-times faster for lower-resolution content. In addition, the Zenverge media processor can simultaneously transcode up to four independent HD streams, or up to 16 independent standard definition (SD) streams, along with supporting full encode of HD content.
  • Entropic's MoCA 2.0 home networking silicon. Entropic brings proven speed and performance with its MoCA silicon and software. Enabling the most robust, predictable and powerful home networking backbone to reliably distribute bandwidth-intensive content throughout the home. With MoCA 1.1 already deployed as the de-facto connected home entertainment standard in the U.S., MoCA 2.0's higher throughput and backward interoperability is perfectly suited to intersect pay-TV provider next generation products and services.
"We're at a critical path in both our development and what the consumer market desires in their home entertainment interests," said Amir Mobini, chief executive officer, Zenverge. "By aligning our paths with Entropic, and maximizing the opportunity their MoCA 2.0 technology brings to the table, we will remain on target to deliver the most groundbreaking new architecture for digital HD convergence — that takes transcoding of digital media entertainment to unsurpassed levels of consumer and operator ease."

"This partnership crystallizes our connected home entertainment strategy and positions us to offer even greater value to our customers, our partners and ultimately the consumer," said Patrick Henry, president and chief executive officer, Entropic. "In addition to the clear strategic benefits of combining two highly complementary silicon products, we believe we can create substantial shareholder value by capitalizing on the consumer demand to have their video content delivered anywhere, anytime and to any device, in the home or on the go."

About Zenverge

Founded in 2005, Zenverge is a fabless semiconductor company devoted to accelerating consumer access to next generation digital content and services. The company is a leading developer of Advanced Media ICs built around the patented ZEN architecture, a core technology for next generation digital media devices. The company is based in Cupertino, California. For more information please visit the company website:

About Entropic Communications

Entropic Communications, Inc. (Nasdaq:ENTR) is a leading fabless semiconductor company that is engineering the future of connected home networking and entertainment by providing next-generation silicon and software technologies to the world's leading cable, telco and satellite service providers, OEMs and consumer electronics manufacturers. As a co-founder of MoCA (Multimedia over Coax Alliance), Entropic pioneered and continues to evolve the way high-definition television-quality video and other multimedia and digital content such as movies, music, games and photos are brought into and delivered throughout the home. For more information, visit Entropicat

Trident announces reduction in force

SUNNYVALE, Calif., Sept. 26, 2011 — Trident Microsystems, Inc. (NASDAQ: TRID), a leading provider of set-top box and TV semiconductor solutions, today announced a key step in its turnaround efforts that will lower its breakeven point through a realignment of its workforce, from approximately 1,275 employees worldwide today to approximately 1,000 employees by early 2012. Headcount will be reduced strategically in all functional areas. As a result of the reductions in labor and other cost saving initiatives, by the first quarter of 2012 the company expects to realize an annual operating expense savings of approximately $40 million to $48 million compared with the annualized run rate as of the second quarter of 2011 and to reduce its annual EBITDA breakeven level (excluding stock-based compensation, restructuring and other non-cash charges) to approximately $340 million to $360 million in annual revenues. The company expects to incur total cash restructuring charges of approximately $8 million to $10 million, including approximately $2 million to $3 million in the current quarter ending Sept. 30, 2011.

“We are taking decisive actions to better position Trident for success as we enter 2012, given the current mass production timing of our new design wins and the soft economic environment,” said Trident’s chief executive officer and president, Dr. Bami Bastani. “Trident has always had very strong technology and good access to customers, both of which are translating into new design wins for our latest TV and Set-Top Box products. By focusing on our core strengths, including connectivity for Smart TV and Smart Box, and our customer centric engagements with a select list of leading OEMs, ODMs, and operators, we intend to position ourselves for stronger financial results and improved returns for our shareholders.”

Tuesday, September 13, 2011

MIPS Technologies Comments on Announcement by Starboard

SUNNYVALE, Calif., September 12, 2011 – MIPS Technologies, Inc. (NASDAQ: MIPS), a leading provider of industry-standard processor architectures and cores for digital home, networking and mobile applications, today acknowledged the receipt of notice from Starboard Value LP (“Starboard”), which owns approximately 9.1% of the outstanding shares of MIPS, regarding its intent to nominate four candidates for election to the MIPS Board of Directors at the Company’s 2011 Annual Meeting of Stockholders. The Company noted that there are three seats up for election at the 2011 Annual Meeting.

The Company does not intend to make a recommendation on Starboard’s nominees at this time and will present its formal recommendation in its proxy statement to be filed with the Securities and Exchange Commission (the “SEC”). The Compensation and Nominating Committee of the MIPS Board will follow MIPS’ policy and procedures for considering director candidates recommended by stockholders.

The Company issued the following statement:

MIPS Technologies’ Board of Directors and management team are committed to acting in the best interest of the Company and all MIPS stockholders. We have had an open dialogue with Starboard since we first became aware of their investment in the Company. MIPS’ Board is actively engaged in the strategy of the Company and is committed to building value for all stockholders.

MIPS has a leading position in the digital home, is strong in wired and wireless networking and is now expanding into mobile. The Company also has a valuable portfolio of more than 580 patent properties worldwide.

MIPS noted that its Board of Directors is comprised of seven highly qualified and experienced directors, six of whom are independent.

Skadden, Arps, Slate, Meagher & Flom LLP is providing legal counsel to MIPS.

Activist Shareholder Starboard launches attack on MIPS

Dear Sandeep,
Starboard Value LP, together with its affiliates and director nominees, currently owns 9.1% of the outstanding common stock of MIPS Technologies, Inc. ("MIPS" or "the Company"), making us the Company's largest shareholder.  This morning, we delivered a letter to the Company formally nominating four highly qualified candidates for election to the Board of Directors (the "Board") at the Company's 2011 Annual Meeting.  
We believe that MIPS' common stock is deeply undervalued and that meaningful opportunities exist to unlock significant value based on actions within the control of management and the Board.  Despite a highly profitable royalty stream, market-leading technology and valuable intellectual property, MIPS stock has dramatically underperformed over an extended time period.  The director nominees we have proposed have the requisite skill sets to assist the Board in evaluating opportunities to improve performance and shareholder value.  
As shown in the table below, MIPS' stock price performance has been dismal dating back to the Company's Initial Public Offering ("IPO") in 1998.  As of August 22, 2011, the last trading day prior to our 13D filing, MIPS shares traded at $4.34 per share, a decline of 69%, versus the IPO price of $14.00.  During the same period, the average share price of MIPS' Peer Group and the broader indices have increased by approximately 120% and 42%, respectively.
    Share Price Performance (1)     
  1 Year   3 Year   5 Year   Since IPO  
Russell 2000 Index
  6.6%  (11.7%)  (6.7%)  42.4%
Peer Group (2)
  8.2%  18.1%  5.9%  119.8%
  (33.1%)  8.5%  (37.2%)  (69.0%)
Underperformance vs. Russell
  (39.8%)  20.2%  (30.5%)  (111.4%)
Underperformance vs. Peer Group
  (41.3%)  (9.6%)  (43.1%)  (188.8%)
1. Performance as of 8/22/11.  
2. Peer Group consists of companies used in MIPS proxy to set executive compensation and include AATI, ARMH, CEVA, ENTR, EXAR, GSIT, IKAN, LAVA, PSEM, PDFS, PLXT, SUPX, TXCC, TRID and VLTR. 
In fact, in the 2011 year-to-date period through August 22, 2011, MIPS' share price declined 71% compared to a decline of only 14% in its Peer Group and 17% in the broader indices.
This destruction in shareholder value is a direct result of the Company's weak operating performance, deteriorating margins and poor capital allocation decisions around internal investments and acquisitions.  In the eighteen months since you were named President and CEO in January 2010, operating margins and profitability have plummeted.  As shown in the table below, operating margins have declined from 22.5% in the third quarter of 2010 to 8.9% last quarter, a reduction of 60%.  While the Company has attempted to drive revenue growth by increasing its spending on research and development and sales and marketing, revenue has actually declined over the last four consecutive quarters and is expected to continue to decline over the coming year.  This continued decline in revenue, together with increases in operating expenses, has caused significant deterioration in operating margins and may continue to negatively impact operating margins into the future.
Weak Operating Performance
($ in millions)
FYE June 30
   Q1   Q2   Q3   Q4  
   Q1   Q2   Q3   Q4  
Royalty Revenue
  9.8   11.4   12.1   12.4   45.7   13.6   14.8   13.4   11.8   53.7   50.4 
License Revenue
  5.2   3.8   5.4   10.9   25.3   8.9   7.0   6.6   5.8   28.4   22.4 
Total Revenue
  15.0   15.2   17.5   23.3   71.0   22.5   21.9   20.0   17.6   82.0   72.8 
  0.1   0.1   0.1   0.6   0.9   0.6   0.3   0.2   0.3   1.3   1.3 
  5.8   5.8   6.3   6.4   24.3   5.9   7.1   7.1   7.6   27.7   32.2 
Sales & Marketing
  3.4   3.6   3.9   4.9   15.8   3.9   4.9   5.4   4.9   19.1   19.9 
  3.1   3.6   3.3   3.6   13.6   3.2   3.7   3.4   3.2   13.5   13.2 
Total Expenses
  12.4   13.0   13.6   15.5   54.6   13.5   16.1   16.0   16.0   61.6   66.6 
Operating Profit
  2.6   2.1   3.9   7.8   16.4   9.0   5.8   4.1   1.6   20.5   6.3 
Operating Margin
  17.0%  14.0%  22.5%  33.4%  23.1%  40.1%  26.5%  20.3%  8.9%  24.9%  8.6%
Source: Company filings.  FY 2012 estimates per Craig-Hallum
Based on MIPS' recently reported fourth quarter results and associated conference call, it appears that the current plan is to press ahead with aggressive spending despite clearly missed expectations.  As the Company's largest shareholder, we have serious concerns regarding the significant deterioration in financial performance and the lack of action to stem the decline in revenues and operating profits.  Further, we are deeply troubled by the apparent willingness of the Board to consider using the Company's cash to pursue acquisitions in light of a terrible acquisition track record and an operating business in need of serious and immediate attention.
As a reminder, on August 27, 2007 MIPS announced the acquisition of Chipidea Microelectronica S.A. ("Chipidea") for an aggregate value of $149 million, plus assumed liabilities.(1)  Prior to the announcement, MIPS shares were trading at $8.17.  As a result of this acquisition, the Company depleted its entire $145 million of net cash and swung to a net debt balance of $11.7 million.(2)  The stated rationale for the transaction was to "strategically enter high-growth segments where analog is essential" and that MIPS expected "to reap significant sales growth from the new partnership."
The Chipidea acquisition proved to be a massive failure.  MIPS' financial results deteriorated and the stock fell to $1.01 per share at its low, 88% lower than where the Company was trading prior to the Chipidea acquisition.  Less than two years later, on May 7, 2009, MIPS sold Chipidea to Synopsis for a mere $22 million, less than 15% of the original $149 million purchase price.  MIPS stated, "Unfortunately, after two big quarters the analog market went into a sharp downturn...affecting our entire business" and that the "limited ability of our balance sheet to absorb that shock is driving this decision."
Given the disastrous results of the Chipidea acquisition and the many years of poor financial performance, we strongly encourage the Board to reconsider its stance on capital allocation.  Instead of pursuing acquisitions, the Company should focus on improving its operating performance and consider allocating capital to buy back shares of MIPS at the current deeply discounted valuation.  We believe this is the best use of excess cash and will significantly benefit shareholders.  
Further, we believe that MIPS' intellectual property may hold substantial value.  To that end, we strongly encourage the Board to explore alternatives for realizing that value for the benefit of all shareholders.
We look forward to continuing to share our views with you.  It should be clear that our nominees are uniquely qualified to assist the Board in evaluating the topics covered in this letter and in taking the necessary steps to enhance shareholder value.  We are happy to engage in a constructive dialogue with you in hopes of reaching a mutually agreeable resolution that will serve the best interests of all shareholders.  
Best Regards,
Jeffrey C. Smith
Starboard Value LP