ARM Profits Smash Expectations, Rumors Fly:

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News Posted: Thu, Apr 28 2011 4:54 PM
ARM Semiconductor, the company whose IP drives a lot of the world's smartphone and tablet devices today, posted excellent Q1 results for the past quarter. Revenue was up 26 percent to $185.5 million and the company's growth significantly outpaced the overall growth of the semiconductor industry. It signed a total of 39 licensees for its technology this last quarter, and 35 in Q4 2010.

A total of 1.85 billion ARM processors were manufactured during Q1, even as the licensing firm signed agreements with the likes of Broadcom and LG Electronics. At present, 61 percent of all mobile device processors are based on ARM technology. "We've had a few quarters now where licensing has been extremely strong in terms of the number of licenses and the value of the licensing," ARM President Tudor Brown told IBD. "That obviously makes us feel very comfortable about royalty payments in the future."

This past quarter also saw "several" semiconductor vendors sign agreements with the intent of developing set top / digital entertainmnet boxes. Analyst Nick James, from Numis, agrees that ARM's licensing business is quite healthy, saying: "the licensing performance of ARM is very encouraging for its long term growth prospects..." It is "becoming increasingly apparent that Mali [ARM's own GPU] is a credible competitor in the market for mobile graphics."


The Cortex-A15

ARM's star is ferociously ascending. AMD was recently spotted crowing over the fact that an ARM executive will keynote an upcoming function and multiple companies are touting ARM products they intend to introduce later this year. Even in situations where the company isn't mentioned by name, it's ARM that provides the CPU hardware underlying Nvidia's Tegra/Tegra 2. Microsoft's major CES announcement was that it was developing an ARM-based version of Windows (currently dubbed Windows 8).

At TSMC's Q1 conference call today, Morris Chang cited ARM as a reason TSMC will remain in a leadership position.
 Almost all the smart phones and tablet application processors utilize ARM architecture. As you know, tablets companies are all use ARM or mostly use ARM architecture. And that is again TSMC sets the advantage because we have products with practically all the tablets companies in the world.

And then tablets companies will gain semiconductor market share in these smart phone and tablet segments. That again turns out to be a TSMC advantage, because as I said, tablets companies are our customers, our partners. And as they gain market share, we gain market share.
ARM's not-so-long-term goal is to create a market for itself in non-mobile spaces from set-top devices to netbooks/notebooks. The upcoming 28nm Cortex-A15 will facilitate this growth, but Intel's 32nm Atom will be up and running by the time ARM's champion takes the field. The two chips will go head to head in an area that might've seemed ludicrous a few years ago: servers. While no ARM licensee has announced concrete plans in this direction, ARM is aware of burgeoning interest. Intel, meanwhile, has announced its own line of Atom servers--it's only a matter of time before the two intersect.
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rapid1 replied on Fri, Apr 29 2011 12:36 AM

I love the last sentence. I thought Tegra2 vs Atom favored Tegra2? I am also certain Tegra3 is already working, and also know TI has devices of Tegra3's viscosity as well (quad core). So who cares about Intels 32nm Atom unless it contains some major upgrades rather than just being made on a smaller nm die. This could be the case I have not looked Atom lately, as up until now Atom has not impressed me since introduction really.

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Atticus14 replied on Fri, Apr 29 2011 4:01 AM

it must be great to be working @ ARM these days... they were doing nicely before but smartphones are the perfect money makers and it doesnt seem like they'll stop anytime soon...

Just think...you have unlimited growth potential as newer generations grow up even more people will use smartphones because these kids are growing up in a tech filled world, your product is subsidized so even if current owners don't need a new phone they'll probably get one anyway because its free/cheap so the demand for your chips never run out even when people dont need them.

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Schmich replied on Fri, Apr 29 2011 9:24 PM

As it is you can't really compare the Atom and an ARM chip like the Tegra 2. The Atom chip is much faster whilst the Tegra 2 uses much less power.

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Joel H replied on Sat, Apr 30 2011 12:11 PM

Schmich,

The Tegra 2 is an ARM core with an NV GPU bolted on.

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wuliheron replied on Wed, Sep 21 2011 7:20 PM

All the giants are making profits, what else is new. The whole world economy is in the dump and the multinationals are the only ones making a profit these days. That includes not least of all Intel, ARM, and Microsoft. With ARM the question has always been how long can the underdog survive against Wintel and just recently Microsoft announced Windows 8 isn't compatible with ARM (Duh!). With Intel having a 4 year lead in fabrication technology and making multibillion dollar investments into more energy efficient processors it still looks like ARM is destined for the bargain bin.

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