ARM flexes muscles with strong profits

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Mobile processor technology firm ARM has announced its financial results for the second quarter of 2011 and they're better than ever.

UK-based ARM earned pre-tax revenues of £117.8 million with pre-tax profits of £33.8 million. Compared to its Q2 figures for 2010, £100 million in revenues and £29.6 million in profits, this was an increase of 18 per cent and 25 per cent respectively.

For the first half of 2011, pre-tax revenues totaled £233.9 million with profits coming in at £64.2 million.

According to ARM CEO Warren East "major semiconductor vendors and consumer electronics companies are making long-term commitments to using ARM technology in their future product developments, underpinning growth in ARM’s long-term royalty revenues."

Unlike other processor companies such as Intel and AMD, ARM doesn't manufacture its chips but licenses the designs to other companies. The company claims 29 new licensees were signed in Q2 2011, leading to a total of 801 licensees overall.

ARM's low-power processor designs dominate the smartphone and tablet markets, so seemingly different chips, such as Apple's A5 or Nvidia's Tegra 2, are actually all based on ARM Cortex reference designs.

This leaves bigger rivals, such as Intel, trailing behind in a growing and increasingly profitable market.

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