ARM smiles its way to the bank as profits double

[Leeky]

<p> Chip manufacturer ARM Holdings had a record third-quarter despite slowdowns reported in most parts of the industry, in large part due to the insatiable demand for chips fitted to smartphones and tablets.</p> <p> The Cambridge-based, UK firm <a href="https://www.arm.com/about/newsroom/arm-holdings-plc-reports-results-for-the-third-quarter-and-nine-months-ended-30-september-2011.php">reported</a> revenue of £120.2 million ($192.3m), up 20% from the same time last year. Pre-tax profits were £55.8 million ($89.12m), up 38.8% on last year's figures slightly exceeding analysts' predictions of revenue around £116.5 million ($186.07m) and £51.1 million ($81.61m) profits.</p> <p> The figures were helped in large part by 43% growth in the processor division with licensing revenue of £37.8 million ($60.37m). The company signed 28 new chip licenses this quarter, 14 of which are entirely new agreements.</p> <p> "In mobile, ARM is benefitting from an increase in the Cortex-A family chips used in smartphones and tablets," ARM's chief executive, Warren East, <a href="https://arm.com/about/newsroom/arm-holdings-plc-reports-results-for-the-third-quarter-and-nine-months-ended-30-september-2011.php">said in a statement</a>. "In fact, Cortex-A shipments into mobile devices grew 300 percent year-on-year." East also commented that the company shipped 1 billion chips for use in smartphones this quarter, and a further 900 million used in embedded devices.</p> <p> Microcontroller sales, used in everyday appliances and toys saw shipments rise by 80% year-on-year. ARM's market share for 2010 was just 10%.</p> <p> “In the third quarter of 2011, we saw a continued high level of design activity with many new customers licensing ARM technology for the first time, driven by end market requirements for smarter, low-power chips. Demand for our technology has come from a broad range of applications, from sensors to computers,” ARM's CEO added.</p> <p> ARM recently <a href="https://www.techspot.com/news/45929-arm-unveils-super-efficient-cortex-a7-will-be-paired-with-a15.html">unveiled</a> that its new super efficient Cortex A7 is to be paired with a Cortex A15, providing high performance and super efficiency in one package. The company also noted that the new Cortex A7 chip would make it easier to sell sub-$100 smartphones that ARM believes will help boost sales in developing regions.</p><p><a rel='canonical' href='https://www.techspot.com/news/46014-arm-smiles-its-way-to-the-bank-as-profits-double.html' target='_blank'>Permalink to story.</a></p><p class='permalink'><a rel='canonical' href='https://www.techspot.com/news/46014-arm-smiles-its-way-to-the-bank-as-profits-double.html'>https://www.techspot.com/news/46014-arm-smiles-its-way-to-the-bank-as-profits-double.html</a></p>

 

[slh28]

I'm surprised they only made £120m from selling 1 billion chips... that's only £0.12 per chip?

 

[Wagan8r]

slh28 said:
I'm surprised they only made £120m from selling 1 billion chips... that's only £0.12 per chip?

Actually, they sold 1.9 billion chips. Read it again.

They spent £64.4 million and profitted £55.8 million. They also received £37.8 million on licensing, so subract that from their profit (since it involves no chip manufacturing) and you get £18 million in chip profit. That mean their cost per chip was £0.0339 and and they sold them for £0.0434 making a profit of £0.0095 on each chip.