Chip designer ARM going strong

British chip designer ARM Holdings on Monday reported a 42 percent jump in revenue for the third quarter, proving that some technology companies are able to thrive despite the continued slump in the sector.

The results arrive on the back of several high-profile deals for the company, whose designs run in a variety of portable devices such as mobile phones and handheld computers. Intel and Texas Instruments both reaffirmed long-standing relationships with ARM, and Microsoft shifted the new version of its PocketPC operating system to ARM-based processors.

Revenue was up 42 percent from the same quarter the previous year to $54.4 million, up 4 percent from the previous quarter. Profits before tax were up 46 percent from the same quarter last year, to $18.7 million. That figure is 6 percent up from the previous quarter.

For the nine months so far this financial year, revenue was up 50 percent from last year to $153.6 million.

"Despite difficult market conditions in the electronics industry, our business continues to deliver strong performance and we continue to experience high demand for our products and services," executive chairman Robin Saxby said in a statement. "We were encouraged to see that unit shipments grew, driven by a further five partners commencing shipments in the quarter to 30 June."

Royalty revenue held steady from the previous quarter at $9.27 million, or 17 percent of total revenue. They accounted for 28 percent of revenue in the third quarter of last year.

The sale of development systems, which chip companies use to design their products, rose sharply from last year to $7.7 million for the quarter. That compares with $5.5 miilion for the same quarter last year. However, the figure was slightly down compared to $8.7 million for the previous quarter this year.

ARM also announced a reshuffle of its board of directors, which sees Saxby becoming executive chairman, Warren East becoming chief executive, Tudor Brown replacing East as chief operating officer and chief technology officer Mike Muller joining the main board.

In addition to the deals with Intel, TI and Microsoft, ARM also formed an alliance with Sun Microsystems in June to create a standard for mobile computing platforms. The deal hinges on ARM's licensing of Sun's Java programming language for its chip designs.

ARM is increasingly becoming a de facto standard in the mobile world. All PocketPC systems now run on Intel StrongARM processors, and Palm, currently the dominant PDA maker, has begin the initial stages of porting its operating system to ARM. Additionally, ARM has been insulated from market problems to some degree because hardware companies tend to spend as much or more on research and development during an economic downturn.

In August, ARM revealed more details of its next core design, ARM10.

Staff writer Matthew Broersma reported from London.