Chip developer Arm, whose technology is found in virtually all smartphones, benefits from entering the data center business. The increased use of artificial intelligence technology is also increasing demand for chips with Arm architecture, company chief René Haas said after presenting the current quarterly figures. Arm shares rose more than 50 percent in early U.S. trading Thursday after its revenue forecast for the current quarter significantly exceeded analyst expectations.
Apple, among other companies, develops processors for its iPhones and now also for Mac computers based on chip architectures designed by Arm. Semiconductor company Qualcomm, whose chips power many Android smartphones, also uses it. Customers pay royalties to Arm for using the chip architecture.
V9 and data center processors boost profits
With the latest chip architecture, called V9, this rate is about double that of the previous one, Haas said. Since chips based on it are now used in all new premium smartphones, this also boosts Arm's sales.
Even more lucrative for the chip designer are data center processors, which generate revenue from multiple computing cores at the same time. The foray into the automobile business is also bearing fruit. Chips based on Arm technology are found, for example, in iPhones, Tesla electric cars, Samsung televisions and also in the coveted artificial intelligence processors of the semiconductor company Nvidia, Haas highlighted Thursday in the CNBC television channel.
Arm raises sales forecast more than expected
For the current quarter, Arm expects sales of between $850 million and $900 million, while analysts, on average, were only expecting a forecast of $778 million.
Arm went public last fall and shares initially stalled at the issue price of $51. Thursday's price jump took it to the $120 mark.
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