Chip designer hails record year

Cambridge-based Arm Holdings; Microchips; Technology

A technology company which last year became the darling of the London stock market has announced record sales and profits as it continues to benefit from consumer demand for smartphones and tablet computers.

Cambridge-based Arm Holdings, which was founded in 1990 and now employs 1,700 people, signed 35 licences in the final three months of 2010 as its microchip technology finds its way into a broadening range of electronic products.

Microsoft gave a further boost to Arm last month when it said its chips will feature in a new range of Windows-based products, including tablets and mobile phones which are due to hit the shelves in two or three years.

Arm’s chips, which feature in the iPhone and the iPad, consume less power than traditional PC microprocessors, vital for battery-powered devices.

The FTSE 100 Index company’s recent success, which helped lift its shares by around 170% during 2010, was reflected in results on Tuesday showing it grew profits by 73% to £167.4 million in the year. Revenues jumped 33% to £406.6 million, while profits for the final quarter were 47% higher at £47.6 million.

Arm makes money by licensing its technology to customers and receives royalty payments every time devices with its chips are made by its clients.

Analysts at Numis Securities said underlying earnings for the fourth quarter were 14% ahead of the City’s consensus, prompting shares to rise 3%.

Arm said 1.1 billion of its chips were shipped into mobile devices in the quarter, while the company also highlighted its presence in non consumer electronics, such as smart meters, with 700 million chips.

Chief executive Warren East said that after a strong recovery in 2010 the semiconductor industry will see more typical growth levels this year.

He added: “Arm continues to sign licenses with influential market leaders in an increasingly digital world.”

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