Wave Computing Set to File Chapter 11

Article By : Nitin Dahad

Assuming Wave Computing files for bankruptcy as expected, MIPS will be free to become independent again...

Rumors are rife this week that Wave Computing, which also has MIPS under its wing, is heading for Chapter 11 bankruptcy. At the time of writing, a simple web search for filings of U.S. bankruptcies does not show them listed, so this is not the case – yet.

However, EE Times has learned through reliable sources that the company is preparing to file for Chapter 11 either by the end of this week or next. Chapter 11 allows for corporate reorganization, so this may or may not be the end of Wave Computing, but we understand that either way, the MIPS business will continue. It was always treated as a business unit within Wave, with intellectual property (IP) and license contracts under MIPS rather than Wave. MIPS is widely understood to have its own revenue stream sufficient to sustain itself.

Wave’s acquisition of MIPS occurred in two stages. First, in 2017, Tallwood Venture Capital acquired MIPS from Imagination Technologies. MIPS then announced it had “returned to Silicon Valley as an independent company.” It said at the time that the MIPS architecture was used in most advanced driver assistance systems (ADAS) and emerging autonomous vehicles — this included the Intel Mobileye EyeQ5 system-on-chip (SoC) for computer vision using the I6500 MIPS CPU.

On its return to the Bay Area, it attracted a stellar group of people to the MIPS Technical Advisory Board, including John Hennessy, former president of Stanford University and an original co-founder of MIPS Computer Systems in 1984, Pradeep Sindhu, who founded Juniper Networks, and Steve Fu, who was former chief strategy officer of Fairchild Semiconductors.

Hennessy said at the time, “Because of its initial simplicity, efficiency, and extensibility, the MIPS architecture has been able to continuously evolve over the years to incorporate new architectural concepts, providing advantages for an ever-changing range of applications. I believe artificial intelligence (AI) will be no exception. Under Dado’s stewardship, MIPS can grow to become the processing architecture of choice for a new generation of intelligent applications.”

The reference was to Dado Banatao, managing partner of Tallwood, who still controls MIPS’ fate. Banatao also just happens to have co-founded Wave Computing in 2008, along with Pete Foley. Wave managed to raise over $160 million over five rounds, the last one being in November 2018. [Side note: Pete Foley left in 2016 and founded another startup, Ascensium.]

Now the clever part is that although Wave Computing acquired MIPS with great fanfare only six months later in June 2018, strictly speaking, it appears the IP was still held by MIPS Tech, Inc., in turn directly owned by Tallwood. So when the acquisition was announced, Wave Computing said that MIPS would operate as an IP business unit and continue to license MIPS IP solutions that would integrate Wave’s dataflow technology and target AI acceleration from the data center to the network edge.

Regardless of the ownership structure, MIPS was effectively a company within Wave, and contracts with customers very likely to be with MIPS. This, we understand, was the same arrangement when MIPS was under Imagination Technologies. Which means all the patents are still held with MIPS.

In September 2019, it was thought the departure of CEO Art Swift seemed to indicate that MIPS future was in doubt. But in fact, on the contrary, it was the systems business within Wave that was struggling, which meant many of its staff and senior management were let go, leaving mainly the IP business — in others words MIPS — as the core business still remaining.

Fast forward to today, and the business appears to have a 100-strong workforce, with MIPS being the main focus. So Tallwood and Wave could either look for investors to buy out MIPS or build the MIPS business through sales and growth. We understand that the largely profitable MIPS business needed to separate from the loss-making systems business, so a viable option would be to file Chapter 11, leaving MIPS free to pursue its strategy as an independent company once again.

Our sources suggest MIPS still has traction in the market, and indeed has its own patent protection. The MIPS I-Class processor core family is thought to be the most profitable part of the business. Beyond Intel Mobileye, a number of companies have licensed MIPS cores. The last publicly announced licensee was Mediatek, planning to use MIPS for next generation connected products. Just over a year ago, Wave said MIPS cores were powering 80% of vehicles equipped with ADAS from leading automotive manufacturers. It also said Valens was using MIPS in its in-vehicle networking products.

Based on what we have learned, it’s thought that Wave Computing, and not MIPS, is in decline. The separation of MIPS within Wave means that if Wave files for Chapter 11, as is widely expected within days, MIPS will be free to pursue its business again as an independent entity, under the direction of Banatao.

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