With its attention being diverted towards Intel Corp and Windows NT, Silicon Graphics Inc is reportedly looking to spin-out its MIPS RISC chip subsidiary in an IPO that BusinessWeek figures might see 20% of its stock floated initially with SGI looking to recoup some $500m long-term. The expectation is that some of MIPS’ biggest users, such as Nintendo and Sony as well as fabricators, including NEC, Philips and Toshiba would grab a piece of the action. A spin-out would be the logical extension to a plan SGI described last year when it said it would turn responsibility for future development and design of MIPS derivations over to its partners supplying parts for the consumer, games and other low-end and embedded markets (CI No 3,209), while maintaining control over development of mainstream CPUs for its computer systems business. SGI has been able to offset the cost of developing high-end CPUs for its workstations and servers – said to be some $60m a year – against revenue from booming sales of embedded MIPS chips. SGI bought its chip supplier in 1992. MIPS declined to comment on the reports. The notion that SGI, given its current predicament, might consider spinning out anything which could stand on its own has been mooted in some quarters.
