IMAGINATION TECHNOLOGIES CONTINUES MARKETING NEXT GENERATION GRAPHICS TECHNOLOGY DIRECTLY

KINGS LANGLEY, UK, June 29, 2006 - --Imagination Technologies Group plc ("Imagination") - a leader in System on Chip Intellectual Property ("SoC IP") - confirms that it continues to market its next generation graphics technology, PowerVR SGX, directly to customers and independently of ARM.

Imagination has for a period been undertaking a careful review of its marketing of PowerVR SGX technology, including detailed discussions with ARM Limited with whom Imagination collaborated on the marketing of PowerVR MBX in a revenue sharing arrangement. Taking into account commercial and strategic factors, its established customer relationships, and the demand for direct partner support and engagements, Imagination will continue to market and license the PowerVR SGX family directly to customers.

Imagination can also report that it has now shipped the next generation PowerVR SGX core to its lead licensing partners. This has enabled partners including Intel, Renesas and NEC to begin integration of the core into their future SoCs. With an increasing number of other serious evaluations and negotiations underway, Imagination is encouraged by the continued levels of engagement for its PowerVR SGX technology.

The success with our current generation graphics family, PowerVR MBX, licensed by many of the world's top semiconductor companies including Intel, Texas Instruments, Renesas, Freescale, Samsung, and Philips, has established PowerVR MBX as the leading mobile and embedded graphics technology of choice. This existing technology is powering the vast majority of hardware 3D-enabled handsets and car navigation systems, with strong future volume growth forecast for several years.

Imagination Technologies and ARM will carry on working together in supporting the current PowerVR MBX customers and will co-operate to ensure that their relevant complementary technologies continue to operate well together and support ongoing market requirements.

About PowerVR SGX

PowerVR SGX, the new generation PowerVR GPU (Graphics Processing Unit) IP core family is part of the Imagination's PowerVR Series5 scalable and fully programmable shader graphics/video architecture. With state-of-the-art support for 2D and 3D graphics, PowerVR SGX has an industry-leading feature set that exceeds OpenGL 2.0 shader and Microsoft Vertex and Pixel Shader Model 3 requirements while maintaining backward compatibility with PowerVR MBX content. The PowerVR SGX family also accelerates vector graphics content processing, including providing class-leading OpenVG performance. PowerVR SGX family video/image decode and encode processing support covers a broad range of standards such as H.264, MPEG-4/2, VC-1 (WMV9), JPEG and others. PowerVR SGX family members target mobile, automotive, consumer and PC markets. PowerVR SGX is based on Imagination's patented tile-based rendering and multi-threading technologies.

The PowerVR Insider program, along with extensive PowerVR SDK tools, supports the 3D graphics ecosystem, fostering relationships between semiconductor vendors, handset manufacturers and content creators, and providing an effective environment for content development so that games, user interfaces, messaging and other mobile applications will always look better and perform better on a PowerVR platform.

About Imagination Technologies

Imagination Technologies Group plc - a leader in SoC IP - develops, licenses and supplies market-leading graphics, video and display cores, real-time multi-threaded DSP/RISC processors and communication and broadcast technologies for the mobile, consumer, automotive and PC markets. It supplies licensable IP (Intellectual Property) supported by advanced development tools to leading semiconductor and consumer electronics companies worldwide. Imagination Technologies Group plc has its corporate headquarters in the United Kingdom and is publicly traded on the London Stock Exchange (FTSE:IMG). See: www.imgtec.com.

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