Arm Holdings PLC on Wednesday forecast fiscal fourth-quarter sales and adjusted profit above Wall Street expectations as customers aim to design new chips for artificial intelligence (AI) work, generating higher royalties for the British technology firm.
Arm’s forecast ranges for its fourth quarter had midpoints of US$875 million for sales and US$0.30 per share for adjusted earnings, above estimates of US$780.3 million and U$$0.21 per share, LSEG data showed.
For the full fiscal year, Arm expects US$3.18 billion in revenue and adjusted earnings of US$1.22 per share, both above analysts’ estimates of US$3.05 billion and US$1.07 per share.
Photo: REUTERS
“We’re seeing more interest in newer designs and newer technologies by customers” due to interest in AI, Arm chief financial officer Jason Child said. “It’s real. Folks are actually buying and licensing that technology.”
For the fiscal third quarter, Arm reported sales of US$824 million and adjusted earnings of US$0.29 per share, topping Wall Street estimates of U$$761.6 million and US$0.25 per share.
Arm, which is still majority-owned by Japan’s Softbank Group Corp after a public listing last year, creates intellectual property that underlies most of the world’s smartphone chips.
The company has also expanded into laptops, where customers such as Qualcomm Inc and Nvidia Corp plan to use its technology for forthcoming chips, and data centers, where Microsoft Corp and Amazon.com Inc now offer Arm-based central processors to developers via their cloud computing businesses.
Arm makes money via licensing deals for its intellectual property and a royalty charged for each chip sold that uses its technology. The company’s US$75 billion valuation on just over US$3 billion in expected fiscal 2024 revenue — a multiple higher than any other firm in the chip industry — rests on its stated plan to obtain far higher royalties per chip than it has historically.
After a smartphone slump last year that caused Arm sales to contract, analysts expect Arm revenue to expand this year as consumers look to upgrade smartphones and laptops for new generative AI services such as chatbots.
Many of the chips in those devices will use the ninth generation of Arm’s core chip architecture, for which the company is charging higher royalty rates than previous versions.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS