Chip maker ARM boosts profits by 44%

UK microchip designer ARM saw customer demand drive profits up 44% to £55.8m in its third quarter results.

UK microchip designer ARM saw customer demand drive profits up 44% to £55.8m in its third quarter results.

ARM, whose chips are used by major smartphone manufacturers including Apple's iPad and iPhones, also saw revenue grow by 20% to £120m, compared with the same period last year.

The company attributed its growth to 14 new manufacturers licensing ARM technologies, and an increase in chip shipments of 10% for mobile devices to one billion and 50% in non-mobile markets such as digital TVs, microcontrollers and networking applications, totalling 900 million units.

Such growth comes despite a reduction in the company's royalty revenues paid on every chip made using its technology due to a "below seasonal growth in the semiconductor industry."

ARM has said it expects to have 50% share of the market used in mobile devices by 2015.

Warren East, chief executive officer at ARM, said: "With customers looking to design ARM technology into a widening product portfolio, ARM is continuing to invest in the development of new products to drive long-term growth in our revenues, profits and cash."

The company said it expects group revenue for the full-year 2011 will be in line with current market expectations of around £108m.

ARM recently strengthened its positioning over competitor Intel, which has been trying to get a foothold in the smartphone chip market, with the announcement of a new Cortex A7 processor which extends smartphone battery life five times. The company has also said that this could allow the production of smartphones costing less than $100.

Reports suggest that by 2015 one in four notebook PCs will ship with an ARM processor, overtaking Intel's dominance in the PC chip market.

Analyst iSuppli has said ARM's growth will be driven by the introduction of Microsoft's ARM-enabled Windows 8 operating system next year.

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