MIPS Technologies, Inc. Reports Third Quarter Fiscal 2002 Financial Results; Contract Revenue Increases 19 Percent Sequentially.

Business Editors

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--April 11, 2002

MIPS Technologies, Inc., (NASDAQ: MIPS, MIPSB) a leading provider of industry standard processor architectures and cores for digital consumer and business products, today reported financial results for its third fiscal quarter ended March 31, 2002. The company will discuss these results and provide guidance for the fourth fiscal quarter in its quarterly earnings call today at 1:45 pm Pacific.

Revenue for the third quarter was $12.7 million, a 6 percent increase sequentially to the second fiscal quarter and a 55 percent decline compared to $28.1 million for the same quarter a year ago. Revenue excluding revenue from Nintendo 64 video game products declined by 28 percent compared to the same quarter a year ago. Contract revenue was $8.6 million, an increase of 19 percent sequentially and a decrease of 28 percent compared to $12.0 million in the comparable period in fiscal 2001. Royalties were $4.1 million, a decrease of 74 percent compared to $16.1 million in the same quarter a year ago, due primarily to lower royalties from Nintendo 64 video game products. Royalties excluding royalties from Nintendo 64 were $3.1 million, a 3 percent decline sequentially and a decrease of 26 percent compared to the same quarter a year ago.

The net loss for the quarter was $1.7 million compared to net income of $8.5 million for the same quarter a year ago. The diluted net loss per share for the third quarter of fiscal 2002 was $0.04 compared to net income of $0.21 per share for the same quarter a year ago.

"While there are early signs of an potential economic recovery, the semiconductor industry has maintained its cautious posture toward design start activity," said Casey Eichler, chief financial officer. "As previously discussed, Nintendo royalties continued to decline, however we experienced increased licensing activity which resulted in revenue growth compared to the previous quarter."

"Although we had another strong quarter of new licensing activity and reasonable license revenue growth, we continue to see many of the elements in the market that have frustrated a faster recovery," said John Bourgoin, chairman & CEO of MIPS Technologies. "Delayed decisions and lowest cost of entry licenses are still the rule of the day. MIPS continues to control its costs while selectively strengthening the organization. Major positive events of the quarter include an advanced development agreement with Toshiba and the addition of AMD as a MIPS licensee as a result of their acquisition of Alchemy Semiconductor," added Bourgoin. "Both companies have the market power to drive the MIPS architecture into new markets in large volumes."

MIPS invites you to listen to management's discussion of Q3 fiscal 2002 results and guidance for Q4 fiscal 2002 in a conference call live beginning at 1:45 p.m. Pacific. Conference call number is [phone]. Replay number is [phone] and will be available for 5 days, beginning shortly after the end of the conference call. The access code is 548730.

Q3 2002 Highlights: Following are selected press release headlines from MIPS Technologies, and the company's licensees, systems vendors and third party providers. A complete listing of announcements for MIPS Technologies and the MIPS(R) architecture can be found at MIPS Technologies Website www.mips.com.

-- MIPS Technologies Welcomes AMD As Newest Licensee

-- Toshiba and MIPS Technologies Agree to Joint Development of Next Generation
RISC-Based Microprocessors

-- MIPS Technologies Honored with Analysts' Choice Award for Best
High-Performance Processor Core

-- MIPS Technologies Expands Asia/Pacific Focus To Capitalize on Global SoC
Market Opportunities

-- U.S. Patent and Trademark Office Confirms All Claims In MIPS Technologies
Patent

-- MIPS Technologies Teams with Accent to Offer SOC Design Services and
Application Platforms for MIPS-Based(TM) Solutions

-- MIPS Technologies and IHP Cooperate in Wireless Broadband Communication
Research

-- MIPS Technologies Announces Microsoft Windows CE .NET Will Support MIPS 32-,
64-Bit Microprocessor Architectures and Cores

-- MIPS Technologies and IN2FAB Technology Team to Deliver Optimized Solutions
for MIPS-based SOC Design

-- Broadcom's SiByte Processor Wins Analysts Choice Award For Best High
Performance Embedded Processor

-- Toshiba Enters U.S. Automotive Market With Cost-Effective MIPS-Based Single
Chip Solution For Car Information Systems

-- Broadcom Integrates Inline Power in Its New MIPS-Based BCM1101, the
Industry's Only Single-Chip IP Phone Solution

-- Philips Semiconductors' MIPS-Based HiPerSmart to Form the Basis of Next
Generation Gemplus' 32-Bit Smart Cards

-- PMC-Sierra Introduces 600 MHz Pin-Compatible RM7000 64-Bit MIPS-Based
Processors

-- SandCraft Announces Production Release of World's Highest Performance MIPS64
Microprocessor at 600MHz

-- Toshiba Launches New Generation of Digital Business Telephone Systems -
MIPS-Based Strata CTX Product Line

-- NEC Announces New Ultra-Low Power MIPS-based VR4181A Microprocessor With 18
Built-in Peripherals

-- Cable Modems Using Broadcom Chips Receive DOCSIS 1.1 Certification; Broadcom
Closes Year 2001 with Over 25 Million MIPS-Based Cable Modem Chips Shipped to
Date

-- Cisco Systems Names New Board Member; - MIPS Technologies Founder, John
Hennessy

-- NEC Electronics' MIPS-Based VR Series 64-Bit Processors Supported by New
Windows CE .NET Operating System

-- Sonics, Nokia, Texas Instruments, MIPS Technologies and UMC Launch OCP-IP to
Standardize IP Core Socket Interface

-- Sony Develops Small Biped Entertainment Humanoid Robot - Based on Two MIPS
Processors

-- Atheros Ships Industry's First Two-Chip Solution for 802.11a Wireless LAN
Access Points; New Technology Enables Enterprise-Quality Functionality at Low
Cost

-- Marconi Trials MIPS-Based Metalink SHDSL Chipset With Major European
Telecommunications Company

-- MIPS-Based Consumer Devices and Communications Technologies Gain Performance
Improvements With Latest CodeWarrior Development Tools From Metrowerks

MIPS Technologies, Inc.

MIPS Technologies, Inc. is a leading provider of industry standard processor architectures and cores for digital consumer and business products. The company drives the broadest architectural alliance that is delivering 32- and 64-bit embedded RISC solutions. The company licenses its intellectual property to semiconductor companies, ASIC developers, and system OEMs. MIPS Technologies, Inc. and its licensees offer the widest range of robust, scalable processors in standard, custom, semi-custom and application-specific products. MIPS Technologies, Inc. is based in Mountain View, California, and can be reached at 650-567-5000 or www.mips.com.

This press release contains forward-looking statements regarding future events or the future financial performance of MIPS Technologies, Inc. Actual events or results may differ materially. Many factors could cause the actual results to differ materially from those contained in such forward-looking statements, including but not limited to: that products will fail to achieve market acceptance, increases in our research and development expenses, the anticipated benefits of our partnering relationships may be more difficult to achieve than expected, the timing of or delays in customer orders, the mix of revenue generated by Nintendo 64 and non-Nintendo 64 video game products, delays in the design process, the length of MIPS Technologies' sales cycle, MIPS Technologies' ability to develop, introduce and market new products and product enhancements, and the level of demand for semiconductors and end-user products that incorporate semiconductors. With respect to MIPS Technologies, we refer you to the documents that it files from time to time with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended June 30, 2001 and subsequent Forms 10-Q and 8-K.

Note to Editors: MIPS(R) is a registered trademark in the United States and other countries, and MIPS-based(TM) is a trademark of MIPS Technologies, Inc. All other trademarks are the property of their respective companies.

                        MIPS TECHNOLOGIES, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, except per share data)
                              (unaudited)

                            Three Months            Nine Months
                          Ended March 31,         Ended March 31,
                          2002         2001      2002         2001
                        --------    --------   --------    --------
Revenue:
  Royalties             $  4,135    $ 16,106   $ 13,580    $ 34,204
  Contract revenue         8,607      12,029     23,635      33,082
                        --------    --------   --------    --------
   Total revenue          12,742      28,135     37,215      67,286

Costs and expenses:
  Cost of
    contract revenue        --          --          250         250
  Research and
    development            8,446       9,543     25,315      24,867
  Sales and marketing      4,916       4,272     13,270      11,414
  General and
    administrative         1,948       2,557      5,506       6,801
  Acquired in process
    research and
    development             --          --        1,737        --
  Restructuring             --          --          437        --
                        --------    --------   --------    --------
   Total costs and
    expenses              15,310      16,372     46,515      43,332
                        --------    --------   --------    --------

Operating
 income (loss)            (2,568)     11,763     (9,300)     23,954
Other income
 (expense), net              510       1,651      2,415       4,883
                        --------    --------   --------    --------
Income (loss)
 before income taxes      (2,058)     13,414     (6,885)     28,837
Provision
 (benefit) for
 income taxes               (380)      4,875       (780)     11,044
                        --------    --------   --------    --------
Income (loss)
 before cumulative
 effect of
 change in
 accounting principle   $ (1,678)   $  8,539   $ (6,105)   $ 17,793
Cumulative effect
 of change in
 accounting
 principal, net
 of tax benefit         $   --      $   --     $   --      $   (741)
                        --------    --------   --------    --------
Net income (loss)       $ (1,678)   $  8,539   $ (6,105)   $ 17,052
                        ========    ========   ========    ========

Per diluted share amounts:

Income (loss) before
 cumulative effect of
 change in
 accounting principle   $  (0.04)   $   0.21   $  (0.16)   $   0.44
Cumulative effect of
 change in
 accounting principle   $   --      $   --     $   --      $  (0.02)
                        --------    --------   --------    --------
Net income (loss)       $  (0.04)   $   0.21   $  (0.16)   $   0.42
                        ========    ========   ========    ========
Common shares
 outstanding-diluted      39,014      40,262     38,969      40,585
                        ========    ========   ========    ========


                        MIPS TECHNOLOGIES, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                            (In thousands)

                               March 31,  June 30,
                                 2002       2001
                               --------   --------
                            (unaudited)
                Assets

Current assets:
  Cash and cash equivalents    $ 97,798   $116,520
  Accounts receivable             5,567      6,443
  Prepaid expenses and
    other current assets          8,052      7,720
                               --------   --------
    Total current assets        111,417    130,683
Equipment and furniture, net      6,793      8,089
Other assets                      9,762      1,661
                               --------   --------
                               $127,972   $140,433
                               ========   ========

Liabilities and  Stockholders' Equity

Current liabilities:
  Accounts payable             $    468   $  3,184
  Accrued liabilities             6,309     10,472
  Deferred revenue                3,593      4,069
                               --------   --------
   Total current liabilities     10,370     17,725

Stockholders'  equity           117,602    122,708
                               --------   --------
                               $127,972   $140,433
                               ========   ========