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31 October, 2006 - 08:06 By Staff Reporter

ARM predicts solid Q4

ARM, the Cambridge superchip designer, saw its share price fall almost three per cent after third quarter revenues dropped below forecasts, although they later rallied to put on over four per cent.The stock was initially hit despite ARM posting record dollar revenues for the third quarter and announcing a significant acquisition.

Dollar revenue was up 20 per cent to $120.7m (£64.8m) and ARM is predicting a solid fourth quarter in line with expectations, based on continuing strong demand.

Along with the unaudited results to the end of September, ARM announced its acquisition of silicon on insulator technology company, SOISIC, for an undisclosed sum.

Privately owned SOISIC has offices in Grenoble, France and Santa Clara, California. It has net assets of around €250,000.

The Grenoble office will become a new design centre for the ARM family of Artisan Physical IP and SOI technology, adding local engineering support for ARM’s European customer base.

Mike Muller, ARM’s CTO said: “SOI technology is a leading candidate to address the power and performance scaling issues associated with traditional bulk CMOS processes as they migrate to ever smaller geometries.

“The acquisition adds a new capability to our physical IP portfolio offering the potential for significantly better optimisation of performance and power consumption for our partners.”

Sterling revenue was 14 per cent higher year-on-year, Income before tax was also ahead by 11 per cent and earnings per share 7 per cent up at 1.12.

CEO Warren East said: “We continue to execute well on licensing across the business; with licensing and royalties performing well we are confident of achieving a solid Q4 in line with current market expectations.”

ARM continues to pile on the headcount in Cambridge and worldwide; It now has 1536 full time staff – up by 65 from the end of the second quarter. The group employs 620 people in the UK, 552 in the States and now more people in India than Europe (178 compared to 136).

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