Intel is to pump £5.28m ($9.88m) into UK-based graphics chip designer Imagination Technologies. The chip giant also said it had extended its licence to use Imagination's video and graphics processing cores - as, separately, did Texas Instruments.

Intel's financial stake in Imagination comes courtesy of its venture funding wing, Intel Capital, which is buuying 6m new shares, or 2.9 per cent of issued stock, according to Imagination.

Intel licensed Imagination's PowerVR MBX architecture back in 2002, eventually using it in April 2004 as the basis of the PXA2700G graphics chip for its XScale PXA27x ARM-based processor line. Since then, it has licensed Imagination's PowerVR SGX, which the smaller company introduced in July 2005.

Of course, Intel now no longer offers XScale processors, the product line having been sold in part to help streamline the chip giant's business but also because the company would rather push the x86 architecture for mobile devices than ARM's technology.

But as the key supplier of integrated chipsets for desktop and notebook PCs, Intel still has an interest in graphics chippery, and it may want to tap Imagination's expertise for that. However, the bigger company is also planning to launch 'Steely', a new x86 CPU pitched at ultra-mobile PCs, sometime next year. PowerVR SGX may also find its way into the core logic that will support the UMPC processor.

Meanwhile, TI today said it has extended its Imagination technology licence to take in its upcoming OMAP 3 ARM-based processor series. ®