MicroUnity was founded in 1988 by microprocessor technology veterans from MIPS, IBM, HP, Intel, Berkeley, and Stanford. With seed funding from W.R. Hearst III and John Moussouris, the company aimed to extend microprocessors beyond their historical role as calculating and control devices, to make them the primary media-processing engines of televisions, mobile computers, smartphones, and other digital communications devices.

Many competing technologies for processing digital media have been introduced in various products over the past two decades. MicroUnity's methods are the ones actually used in the microprocessors of more than five billion PCs, laptops, and mobile devices to execute software for playing movies, music, videogames, and many broadband internet applications.

MicroUnity implemented a series of innovations that unified audio, video, graphics, wireless, and other communications functions into a single general-purpose programming model. One key advance was dynamic partitioning of a microprocessor's datapaths, registers, and execution units to perform arithmetic, data rearrangement, and other necessary operations in parallel on all sizes and types (e.g., floating and fixed-point) of digital media data.

Another key challenge was to produce media processors within the practical cost and power budgets of consumer electronics. When manufacturing capacity was severely limited during the semiconductor boom of the early 1990's, MicroUnity built a semiconductor factory in Sunnyvale, California. Here some basic innovations to improve microprocessor cost were put into practice.

After selling the factory in 1996, MicroUnity broadly commercialized its key lithography inventions for optical proximity correction (OPC)—basically compensating for diffraction around features smaller than the wavelength of light. OPC technology roughly doubled yields of microprocessors at AMD, National Semiconductor, and other manufacturers. MicroUnity's lithography business unit became profitable and was sold in 1999 to Dutch lithography leader ASML as its MaskTools division, forming the basis for a semiconductor manufacturing technology now used worldwide.

MicroUnity invested the proceeds from MaskTools in continuing to innovate in many areas of media processing: e.g., instruction set and execution unit design, memory control and I/O interfaces, and signal processing software. In the past decades, the company accumulated a large patent portfolio, some of which has been licensed to leading technology companies. In 2003, MicroUnity asserted some of its patents in litigation against Intel and Dell, which concluded with a settlement in 2005. Subsequent patent litigations with Sony and AMD were also settled in 2007; and litigation with Apple, Samsung, Texas Instruments, Qualcomm, and other mobile communications companies were settled in 2013.

In 2008, MicroUnity used some of its cash from litigation settlements to purchase the stock of all of its outside investors, thereby becoming an overwhelmingly employee-owned company.

MicroUnity's core group of inventors and operating managers continue to develop a new generation of broadband microprocessor innovations called BroadMX. These innovations help improve power and performance of 3D graphics, HD video, 4G wireless, and other software-based broadband applications in an ever-widening range of versatile communications products.