ARM revenues up 20 percent in Q3

ARM has seen its revenues rise 20 percent in its Q3 results as customers continue to spend on mobile devices.

Competitors such as Intel and AMD may be suffering from slow PC sales, but ARM has seen the popularity of its processor technology grow – with royalties for its chip designs up 27 percent year on year in the quarter.

The company saw 2.2 billion chips shipped using its designs. ARM architecture and processor licences, it boasted, have ended up in a broad range of applications from hearing aids and automotive braking systems to smartphones and tablets. Its Mali graphics processor range also performed well, the British firm said.

Revenues were £144.6 million for the quarter, up 20 percent from £120.2 million year on year.

Pre-tax profits were £68.1 million, up 22 percent from £55.7 million last year.

ARM CEO Warren East commented that mobility and cloud computing continue to helping push the company’s revenues up.

“ARM has delivered another quarter of strong revenue and earnings growth,” East said in a statement. “As we move into an ever more connected world of mobile computing, cloud-based networks and the Internet-of-Things, ARM is seeing increased demand for its high performance and low power technology.”

East continued: “This demand is helping to drive ARM’s licensing revenues and this quarter we saw market leaders license ARM’s advanced processor technology for next generation super smartphones, tablets, and mobile and embedded computing applications.”

The company promises that it is entering the final quarter with a ‘record’ order backlog, and its outlook for licensing is positive.  Data derived from its own customers points towards a “moderate sequential increase” in royalty revenues in the next quarter as well, it said.

ARM’s results contrast with the tough situation Intel and AMD have found themselves in, as macroeconomic conditions and slowing PC sales impact margins.  Aside from the dwindling returns in many western markets, according to some analysts, 2012 will see the first worldwide declines in PC sales for a decade. 

It has been said for some time now that the dominance of the traditional semiconductor firms would be threatened by mobility, and ARM’s many contract wins for its low powered designs – more suited to mobile computing – are clearly leaning on the rest of the market.  

In contrast to its competitors ARM has seen its position improve due to the boom in mobile computing.  

Meanwhile, analyst house IHS iSuppli forecasts that the release of Apple’s rumoured iPad Mini will help grow the market for seven inch tablets – an area where ARM is dominant – by two fold this year, reaching 34 million units, before a similar rise to 64 million next year.