ARM Profits Surge on Smartphones, Tablets

Chip maker ARM Holdings posted an 86 percent surge in profit, thanks to strong demand for smartphones and tablets.

The Cambridge, U.K.-based company said it shipped 1.8 billion chips in the October-December period for a $47.9 million profit, adding that it will continue to gain market share from PC-stalwarts Intel and AMD.

“In 2010, ARM grew about 30 percent while the overall market grew about 15 percent,” said Tim Score, ARM’s chief financial officer. “This year we expect the industry to grow about 5 to 8 percent, and we will grow faster. Most tablets that we can see coming forward are ARM-based.”

ARM’s strength in the smartphone market where its microchips are in about 95 percent of the world’s mobile devices, including the iPhone and iPad. But rather than manufacturing and selling its processors, the company licenses out its blueprints to chip mkaers, and then collects royalties.

The success of Google’s Android operating system, which recently topped Symbian to become the world’s best-selling mobile software, also helps ARM by standardizing a platform.

In addition, earlier this month, Microsoft said it plans to license ARM desgins for the next version of its Windows operating system.

Meanwhile, Intel is fighting to catch up, releasing its new “Moorestown” chip, which it hopes will re-establish its dominance in the sector.

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