The recent interest in British chip design firm ARM is proving to be good news for the company's many licensees, with Qualcomm reporting a massive 39 per cent jump in its first quarter income year-on-year.
Unlike traditional semiconductor companies, such as Intel, ARM doesn't actually build anything. Instead, it designs low-power high-performance chips for portable devices, and licences the right to build variations on its designs to third-party companies.
It's a vastly different way of doing business compared to the traditional chip design firms, but one that is proving a success for ARM. With numerous licensees producing chips based on ARM designs for products as varied as games consoles, TVs, smartphones, and tablets, the company's approach seems to be paying off.
It also means that its success is spread across the market. While the company has recently seen its share price skyrocket on the news that Microsoft will be adding ARM support to Windows 8, that same news - along with numerous ARM-powered product announcements at the Consumer Electronics Show this year - have helped to drive interest in the companies that licence ARM's designs.
Qualcomm is one such company. Creator of the ARM-based Snapdragon range, which can be found powering a number of high-performance tablets and smartphones, Qualcomm has seen its first quarter profit jump 39 per cent compared to the same period last year.
That sudden rise, which saw the company take $1.11 billion in the first financial quarter of 2011, has been described by Qualcomm chief executive Paul Jacobs as a 'record.'
"We are very pleased to report record revenues, earnings per share and MSM chipset shipments this quarter," Jacobs stated during a conference call, "driven by increased demand for smartphones and data-centric devices across an expanding number of regions and price points."
Qualcomm's success isn't purely down to the growing interest in ARM-based chips. The company also produces wireless communications technology - making it one of the few companies an OEM can go to and get graphics, processing, and communications semiconductors from a single source.
And as the smartphone and tablet markets grow throughout 2011, it's likely that Qualcomm will be reporting further bumper incomes - and what's good for Qualcomm is good for ARM.