ARM sales, profits rise as partners gain market share

LONDON – Processor technology licensor ARM Holdings plc exceeded expectations of revenue with a strong fourth quarter and full year 2011 that outperformed the semiconductor industry as a whole in terms of growth.

ARM (Cambridge, England) has reported that total revenues in 4Q11 were $217.0 million, up 21 percent on 4Q10 and up 12.8 percent on $192.3 million in 3Q11. The Q4 sterling revenues were £137.8 million, up 21 percent year-on-year. Full-year total revenues were $785.0 million, up 24 percent on 2010. It also exceeded previous guidance of $763 million revenue for the full year.

ARM's Q4 processor royalties were based on shipments of 2.2 billion ARM technology-based chips, a record number, shipped in the third quarter. ARM chip royalties are recognized a quarter in arrears. The average royalty per chip was slightly up versus the previous quarter at 4.5 cents per chip ARM said.

ARM gained share in non-mobile end-markets throughout 2011. Shipments of ARM-based microcontrollers and smartcards grew about 80 percent year-on-year, compared to 5 percent for the overall microcontroller market, ARM said. The embedded market now represented 25 percent of all ARM-based processor unit shipments in 4Q11, up from 19 percent in 4Q10.

ARM also take in money in the form of initial license fees and it signed 25 licenses for processors in Q4 including 5 for Mali graphics processors. The 9 licenses signed up for the high-end Cortex-A series processors included two that are companies acting as lead partners on the ARMv8-A architecture that supports 64-bit computing.

The 5 Mali licenses include two existing ARM customers each taking their first Mali license. This brings the total number of Mali licensees to 58, ARM said. However, in a breakdown of processor shipments Mali was not shown to have any volume by units. ARM7, ARM9 and ARM11 were still responsible for 44, 24 and 9 percent respectively in terms of unit shipments. Cortex-A, R and M were responsible for 6, 2 and 15 percent respectively.

On the physical IP front ARM signed a third foundy to a royalty-bearing license. This joins 9 similar deals at 32/28-nm and 6 at 45/40-nm.

"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," said Warren East, CEO of ARM, in a statement.

East said ARM was well positioned for 2012 and in its outlook ARM said it expected first quarter revenues to be about $200 million, and so long as the general economic situation does not deteriorate markedly in 2012 the full year should see ARM achieving further revenue growth to just over $860 million.


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