Chipmaker Arm says it will grow faster than rivals

MICROCHIP designer ARM met expectations for third-quarter revenue and earnings yesterday and said it expects to outperform a recovery in the industry next year.<br /><br />&ldquo;Despite pressure on customers&rsquo; R&amp;D budgets this year, demand for ARM&rsquo;s processors and physical IP technology remains strong, with a record numbers of licences signed in the third quarter,&rdquo; said finance director Tim Score. &ldquo;Since the middle of the year, activity levels and the level of optimism in the industry have improved.&rdquo;<br /><br />Score said all signs pointed to a significant pick-up next year, and ARM expected to beat the 15 per cent forecast rise for the sector.<br /><br />The company, whose designs are in 90 per cent of mobile phones, including Apple&rsquo;s iPhone and Nokia&rsquo;s N97, said it expected full-year sales in dollar terms at least in line with market expectations, which it put at $476m.<br /><br />Shares in the Cambridge-based firm, which are up 72 per cent since the start of the year, closed up 0.6 per cent at 150p yesterday.<br /><br />Panmure Gordon analyst Nick James, who has a &ldquo;sell&rdquo; recommendation on ARM shares said: &ldquo;This is a solid set of numbers, but given the third quarter outperformance, it is a little disappointing that guidance is not upgraded at this point.&rdquo; <br /><br />UBS, however, said the group&rsquo;s strong margin performance would likely see forecasts rise.<br /><br />Chipmakers, led by ARM rival Intel, the giant US firm, have been increasingly optimistic about a tech sector recovery before the holiday season,