Chip Core Developer Engineers A Rebound; Silicon Graphics spinoff, hit hard by tech slump, re-emerges as hot stock.(INTERNET & TECHNOLOGY)(Q & A)

Byline: JAMES DETAR

U.K.-based ARM Holdings carved out a profitable niche by creating chip core designs and licensing them to chipmakers. It's the leader in that market, with sales last year of $263 million.

But Mips Technologies is coming on strong. And though still small, with sales of $56 million in 2004, its year-over-year revenue has risen 40% to 45% each of the last three quarters.

Chip cores are tiny processors. Chipmakers combine them with memory and other circuits in system-on-chip devices. They go into a wide range of products, from autos to DVD players.

More than 60 chipmakers license Mips cores, especially its 24K released last year. The 24K is the successor to Mips' R4000 processor.

Mountain View, Calif.-based Mips spun out of computer maker Silicon Graphics in 1998. (SGI bought an earlier company, Mips Computer Systems, in 1992.)

The newly independent Mips Technologies had a couple of rough years after the tech market tanked in 2001. But it's come back.