iPad chip maker Imagination Technologies has acquired Caustic Graphics for $27 million (£17.1 million) in cash.
The deal, which follows the $47 million acquisition of HelloSoft, will help the company focus more on the creation of 3D graphics for smartphones.
The acquisition of HelloSoft is set to push Imagination's video and voice-over IP products and boost its wireless technologies.
Imagination CEO Hossein Yassaie said in a statement: "Today, 3D graphics don't look like the real thing. But Caustic's technology is different – these are photo-realistic images."
“The acquisition will enable us to accelerate our plans to be the leading supplier of all forms of graphics technologies in all markets and to continue our mission of delivering the most advanced graphics technologies to mainstream markets,” he added.
According to The Telegraph, Imagination predicts that the acquisition will help bring 'Avatar-style graphics' to gaming consoles, TVs and mobile phones within the next few years.