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.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in