One of Britain’s leading microchip businesses is racing to complete a $1bn (£740m) sale as it grapples with the impact of Donald Trump’s trade war.

Imagination Technologies, which designs graphics processor technology for customers such as Apple, has held sale talks with two US rivals.

Bosses of the Chinese-owned company are also considering a potential break-up to get a deal over the line, which could include selling its valuable patent portfolio.

It is understood that executives have put a $1bn price tag on Imagination, with bankers from Lazard overseeing the process.

In a memo to staff, Ray Bingham, Imagination’s chairman, said “the Galway Project”, which refers to the sale talks, “continues to progress well”.

The memo added: “The second-to-none creativity and expertise of our teams is an incredible asset to capture the unique opportunity created by the current AI revolution.”

It comes after the president’s trade war with China has rocked the tech industry, including at UK-based Imagination.

Pressure has arisen after the US introduced increasingly stringent sanctions on China’s chip industry, as Mr Trump seeks to limit China’s access to Western technology.

This stems from fears that it could be used by Beijing’s military.

Imagination, which is based in Hertfordshire, was taken private by US-based investor Canyon Bridge in a £550m deal in 2017.

However, the business was later engulfed in a political storm after Canyon Bridge’s Chinese backers attempted an unsuccessful boardroom coup.

This led to the departure of the then-chief executive, Ron Black, who blew the whistle on the Chinese effort to take control of the business.

Last year, an employment tribunal ruled Imagination had unfairly sacked Mr Black, who had sued the company for £200m. Damages are yet to be determined.

Canyon Bridge has been considering its options for Imagination for several years, at one stage exploring a Chinese float and then a US listing.

According to its latest accounts for the year ending December 2023, Imagination’s revenues increased by 3.6pc to £124.6m, although its profits plunged by 78pc to £2.6m.

At the time, the company warned that “US and UK export controls” on its Chinese customers had “stymied top-line revenue growth”.

As for its management, staff were told earlier this month that Simon Beresford-Wylie, the current chief executive, is preparing to leave the business. Didier Lamouche, a board member, will lead the business in the interim while it appoints a successor.

A spokesman for Imagination declined to comment.

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