UK chip manufacturer ARM increases sales by 28%

ARM sales rise by almost 30% as the increase in the use of smart devices drives demand for its processors

ARM has increased its sales by almost 30% in the first three months of 2013 compared to the same period last year as the increase in the use of smart devices drives demand for its processors.

The company also announced a jump in profit of 30.8%, reaching £67.1m.

The IFRS (International Financial Reporting Standards) rated figures also showed that ARM revealed sales worth £170.3m during the quarter, a rise in sales of 28.5% from the £132.5m recorded last year.

The company also said it has signed 22 licences to use its chip technology across multiple markets during the recent quarter. These markets included smartphones and mobile computing, digital TVs as well as wearable technology.

ARM has seen strong year-on-year shipment growth across all of its segments, with embedded chip sets up 50% and mobile chips up 25%. A total of 2.6 billion ARM-based chips were shipped during the quarter, a growth of 35% year-on-year.

Meanwhile, the company acknowledged that general sales in the industry have seen a decrease in revenue of around 10%, and it expected the company’s second quarter results to be more in line with the current market.

Warren East, CEO of ARM, said everyday devices are becoming smarter, more connected and more energy efficient, which is increasing the applicability of and demand for ARM’s technology.

"The growth in smartphones and tablets continues to benefit ARM. Even low-cost smart devices can contain multiple ARM‐based chips and be based on ARM’s advanced Cortex‐A series technology and Mali graphics processors,” he said.

East, who is soon to step down from his role after 12 years as CEO, has seen the company become dominant force in the smartphone chip market, with 95% market share in 2012.

ARM president Simon Segars meanwhile, has vowed to maintain the microchip designer’s independence when he takes over the helm from East at the end of June.

Segars, who has been with ARM for 22 years, said he will resist any takeover attempts and keep the fierce independence. By creating designs that can be licensed to other companies instead of manufacturing chips itself, ARM has designed 32% of semiconductors sold worldwide, compared with Intel’s 16%.

Computer Weekly has reported companies that use Intel processors – such as Dell and HP – are suffering due to poor take-up of new PCs. Reflecting the state of the PC market, Intel’s first quarter of 2013 financial report showed sales in its PC client group of $8bn, down 6% year-on-year.

Intel, expects PC manufacturers to introduce thin, touch-enabled laptops costing as little as £130, which could stimulate demand for new laptops.

Meanwhile revenue in Intel’s datacentre business was $2.6bn, up 7.5% year-on-year. Overall, its revenue was down 7% at $12.6bn.

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