Cambridge based ARM has had a great Q3 2012, largely due to the recent launch of the Apple iPhone 5 and Samsung Galaxy Note tablet successes, reports the FT. Company revenues were £144.6 million (up 20 per cent), bringing in a pre-tax profit of £68.1 million (up 22 per cent). The revenue figure also beat market expectations. The markets have reacted favorably and the shares are up over 4 per cent so far in London, after just over an hours trading.
ARM’s CEO, Warren East said “ARM’s royalty revenues outpaced the industry with continued market share gains in key end markets including digital TVs and microcontrollers”. Selling more higher end chip licenses also helped margins explained Mr East “The increasing penetration of Cortex-A class technology and adoption of Mali graphics in consumer electronics also helped increase ARM’s overall royalty revenue per chip.”
Highlights of the “key growth drivers in Q3” are;
- Growth in adoption of ARM® processor technology
- 29 processor licenses signed for a broad range of applications, including deeply embedded products such as chips for hearing aids and automotive braking systems, and consumer electronics such as smartphones, TVs and tablets
- Momentum in high-end computing and networking applications continued, with the signing of one ARMv8 architecture license, one ARMv8 processor license and one Cortex-A15 processor license
- Growth in shipments of chips based on ARM processor technology
- 2.2 billion chips shipped, split equally between mobile and non-mobile segments
- Processor royalty revenue grew 27% year-on-year, driven by strong growth in Cortex-A and Mali-based chip
- Growth in outsourcing of new technology
- Mali™ graphics processor licenses signed, including three with new customers for Mali technology
- 4 physical IP Processor Optimisation Packs licensed, enhancing ARM’s royalty opportunity per chip
Looking at Q4 and further ahead the company press release and notice of results said “ARM enters the final quarter of 2012 with record order backlog and a robust opportunity pipeline. This combination points to another strong quarter for licensing revenue in Q4.” However ARM continues to warn that the traditional Christmas uplift may be subdued this year. Despite the iPad mini about to explode onto the tablet scene.
ARM licensed processors in smartphones, tablets and other low power gadgets are still the default choice of manufacturers, though Intel and AMD would love to carve out a piece of the market. Both PC CPU stalwarts are targeting low power all day performance in their roadmaps. Intel has made some small smartphone inroads. The first impact ARM would feel from Intel of AMD would be in tablets I would say, as it is closer to the traditional desktop PC market, especially when Windows 8 arrives.