ARM smiles its way to the bank as profits double

[Leeky]

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.

The Cambridge-based, UK firm reported 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.

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.

"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, said in a statement. "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.

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%.

“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.

ARM recently unveiled 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.

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https://www.techspot.com/news/46014-arm-smiles-its-way-to-the-bank-as-profits-double.html

 

[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.