ARM outperforms in 2011, ships in 1.2bn mobile devices

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ARM outperforms in 2011, ships in 1.2bn mobile devices

Company sees revenues leap by 21% in Q411 as it pushes into new segments and as high end Cortex-A gains new licensees

By CAROLINE GABRIEL

Published: 31 January, 2012

READ MORE: Financial | ARM | Processor

ARM Holdings outperformed market expectations and the overall semiconductor sector in 2011, with its IP underpinning 1.2bn processors which shipped in smartphones and other mobile devices, up 10% year-on-year.

In its fourth quarter, the UK-based firm, the dominant processor platform in smartphones and tablets, saw Q411 revenues rise by 21% compared to the year-ago quarter, to £137.8m ($217m), and net profit rise by 28% to £69m. For the full year, revenues were $785m, up 24% on 2010 and well ahead of guidance of $763m.

ARM has huge market share in handsets, despite the start of an incursion by Intel's rival x86 architecture, but it is also reaching into new markets. Some of these are unproven as yet, such as low power servers, where the ARM platform is trying to enter Intel's heartland. Others are already bearing rich fruit, notably an expanded effort in embedded and consumer devices. In these two sectors, ARM's ultra-low power and microcontroller designs shipped in one billion chips, up 40% year-on-year.

CEO Warren East said: "As our customers are designing more ARM technology into their widening product portfolios, ARM is investing in the development of new products. These products will drive further long term growth in our revenues, profits and cash."

East added in his statement: "In Q4 and throughout 2011 ARM has seen strong licensing growth, driven by market leading semiconductor companies increasing their commitment to ARM technology, and more new customers choosing ARM technology for the first time. We have also seen our royalty revenue continue to grow faster than industry revenues as the ARM Partnership gains share in our target markets."

ARM emphasized the "uncertain global macroeconomic situation" but said that, assuming this did not deteriorate significantly, the firm expected group dollar revenues for full year 2012 to be at least in line with current market expectations of just over $860m, with $200m in the current quarter.

Processor royalties in Q411 were based on shipments of 2.2bn ARM -based chips, a record number, shipped in the third quarter (the firm's royalties are recognized a quarter in arrears). The average royalty per chip was slightly up on the previous quarter at 4.5 cents per chip, ARM said. ARM also gains revenue from initial licence fees and it signed 25 new licences in the quarter, including five for its Mali graphics processor platform and nine for the new high end Cortex-A processor. Two of those Cortex-A users are acting as lead partners on the ARMv8-A architecture, the first to support 64-bit computing.

There are now 58 Mali licences, but its volumes remain slow in terms of shipments. In a breakdown of processor unit shipments, the established ARM7, ARM9 and ARM11 platforms were still responsible for 44%, 24% and 9% respectively, while Cortex-A accounted for 6%, the Cortex-R real time processor for 2% and the Cortex-M embedded and microcontroller design for 15%.

The firm said that 55% of its unit shipments now fall into the mobile category, with the rest in the enterprise (16%), home (4%) or embedded (25%) sectors. It claims 90% share of the smartphone market and 95% in low end handsets.