Chip shortage helps ARM to record royalty revenues

Chip shortage helps ARM to record royalty revenues

Business news |
By Nick Flaherty

UK processor core designer ARM has seen record revenue in 2021, partly as a result of the chip shortage.

The Cambridge-based company saw 20% growth in royalty revenues to $1.54bn from each of the 29.2bn chips shipped. This was helped by strong growth of 5G smartphones and more ADAS driver assistance chips going into cars, says the company. This is also down to price increases in 32bit microcontrollers, which have been in higher demand and so there has been a shortage.

Licensing revenue also rose 61% to $1.13bn as the company has reduced the cost of taking a license to attract designers that have also been looking at the open source RISC-V instruction set and open source design tools. “Our expanded product portfolio and new business models such as ARM Flexible Access gave more customers more reasons and more ways to license ARM technology,” said the company.

The overall increase of 35% to $2.7bn will be key to demonstrating the growth opportunities as owner Softbank plans to float the company on an international stock exchange in an IPO. Being part of the group means that other details, such as the breakdown of business for its troubled China joint venture, is not disclosed.

The move to IPO comes after Nvidia’s failed takeover bid that saw long term CEO Simon Segars leave the company. However it will come at the time the industry sees a significant slowdown.

“Our record results demonstrate that the demand for Arm technology and the strength of the Arm ecosystem has never been greater – our compute platform will power the next set of technology revolutions across cloud computing, automotive and autonomous systems, the IoT, the Metaverse and beyond,” said Rene Haas, CEO of ARM who replaced Segars . “As we look ahead to a future built on Arm, our priority is to continue to deliver on our business strategy, enable partners with the solutions they need through further investment in our roadmaps and engineering talent, and together with our ecosystem redefine the future of computing.”

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