ARM’s chips power virtually the entire smart phone and tablet industry, with Apple’s iPhone and iPad using the processors, along with Samsung’s Galaxy line of smartphones and tablets.
The company says that 2 billion chips using its designs were shipped in the quarter ending June 30, a 9% increase year-over-year. ARM said it generated £39.4 in after tax profit on revenue of £135.5 million, beating all analyst forecasts which projected revenue of £129.8 million.
“ARM’s royalty revenues continued to outperform the overall semiconductor industry as our customers gained market share within existing markets and launched products which are taking ARM technology into new markets,” said Warren East, ARM’s CEO, in a prepared statement. “This quarter we have seen multiple market leaders announce exciting new products including computers and servers from Dell and Microsoft, and embedded applications from Freescale and Toshiba.”
Chief Financial Officer Tim Score told Retuers that ARM’s chipmaker customers were sounding notes of caution, as they expect demand to slow down over the rest of the year. While this may concern some analysts, the company’s lucrative licensing structure meant that executives weren’t overly considered about not meeting market expectations.
ARM’s Chief executive expanded on Mr. Score’s statement when speaking to the Financial Times, telling the Times that although the company will continue to operate with a healthy profit margin its fourth-quarter even though it will likely see a dip in royalty payments from licensees.
“By implication we are anticipating the seasonal uptick that we usually experience in the fourth quarter to be a bit muted,” he said.
The growth in popularity of ARM’s chips continues to worry traditional chipmakers, as some OEMs are considering incorporating them into personal computers and servers.