Britain's Imagination Technologies (London: IMG) said it plans to acquire U.S. chip-designing pioneer MIPS Technologies for $60 million in efforts to battle ARM Holdings (Nasdaq: ARMH) for chips vital to the mobile market.

MIPS, of Sunnyvale, Calif., is a pioneer using the now common architecture powering most high-powered microprocessors in computers and smartphones. Now many of its designs support the Android OS from Google Inc. (Nasdaq: GOOG), which run in about 80 percent of all smartphones.

To date, Apple Inc. (Nasdaq: AAPL), the world's most valuable technology company, has used the A-series of chips designed by ARM Holdings for its iPhone and iPad series. The iPhone 5 and iPad now use the A6 chip, although there is speculation Apple may design future microprocessors on its own.

Separately, ARM Holdings, with several undisclosed partners, said it will acquire 498 patents from MIPS for about $350 million, as well as a license to use 82 patents sold to Imagination.

Effectively, it's a lifetime insurance policy,” said ARM Holdings CFO Tim Score.

Imagination CEO Hossain Yassie said all of MIPS's 160 employees in Sunnyvale, Calif. Like many semiconductor companies, MIPS designs but doesn't manufacture any chips.

MIPS supplied the original brains to the high-powered workstations used by Silicon Graphics International Inc. (Nasdaq: SGI) which acquired MIPS and then spun it out again.

Besides use in high-powered servers, MIPS technology became known to the public in “Jurassic Park” and other movies that relied upon computer graphics. Now the next generations of that technology are useful in low-power, high-speed designs for mobile platforms.

Imagination, which said it expects to close the acquisition next quarter, said adding the chips from MIPS to its designs of graphics, video and radio processors makes it a more robust designer.

It also adds an “eco-system” of suppliers and designers to Imagination's current network, the company said.

Shares of MIPS fell 2 cents to $7.20 in midday Wednesday trading. They're up 61 percent this year.

Shares of Imagination Technologies closed up 4.91 (US 78 cents) pence to 479.21 pence. They've lost about 13 percent this year.