Chip developer Arm, whose technology is installed in almost all smartphones, is benefiting from a move into the data center business.
The increasing use of artificial intelligence technology is also driving demand for chips with the Arm architecture, company President Rene Haas said after presenting quarterly figures on Wednesday. Arm shares rose by about a fifth in after-hours trading after sales forecasts for the current quarter significantly beat analysts' expectations.
Based on chip architectures designed by Arm, Apple, among other companies, develops processors for its iPhones – and now also for Mac computers. It's also used by semiconductor company Qualcomm, whose chips power many Android smartphones. Customers pay Arm a fee to use the chip's architecture.
In all new premium smartphones
With the latest chip architecture, called V9, those fees are about double the previous fees, Haas said. And since chips based on them are now used in all new premium smartphones, this is also driving sales for Arm.
The most profitable for chip designers are data center processors, which generate charges for several computing cores at the same time. For the current quarter, Arm expects sales between $850 million and $900 million, while analysts on average only expected a forecast of $778 million.