ARM rings up revenue gains for quarter; MIPS retreats

ARM rings up revenue gains for quarter; MIPS retreats
By Peter Clarke, EE Times
October 15, 2001 (12:23 p.m. EST)
URL: http://www.eetimes.com/story/OEG20011015S0039

Peter Clarke

LONDON — The two leading sellers of microprocessor cores as intellectual property, ARM Holdings plc and MIPS Technologies Inc., reported widely differing results for the recent quarter ended Sept. 30.

ARM (Cambridge, England) showed that its diversity of design wins is lifting revenues even though its core base in telecommunications has been slow. At the same time, Robin Saxby, ARM's chief executive officer since the company's formation in 1990, has given up the position to become executive chairman of ARM's board of directors. Saxby previously held both positions. Warren East moves up from chief operating officer to the position of chief executive officer.

Meanwhile, MIPS (Mountain View, Calif.) is struggling under its heavy past dependence on Nintendo 64 videogame products.

MIPS' sales revenue for its first quarter of fiscal 2002 was $12.5 million, a 38 percen t decline compared with $20.2 million for the same quarter a year ago.

Meanwhile ARM's sales revenue for its third quarter was about $55 million, up 42 percent from about $38 million a year earlier, and 4 percent higher sequentially than the previous quarter.

The picture was similar in terms of profit and loss. MIPS turned in a net loss for the quarter of $930,000, compared with a net income of $4.3 million for the same quarter a year ago. In contrast, ARM posted a profit before taxation of about $19 million, up 46 percent on the same quarter a year earlier of about $13 million, and 6 percent higher than the previous quarter.

"Although we met analysts' earnings expectations in this challenging business environment, first-quarter revenue did not meet our goals," said Casey Eichler, chief financial officer of MIPS. "On top of recent cost-savings measures, we are taking additional steps to manage our spending in what continues to be an uncertain global economy."

"Despite the continuing unpreced ented declines in the semiconductor industry, further exacerbated by the events of September 11, we grew the number of new processor core license agreements significantly quarter over quarter," John Bourgoin, chairman and chief executive officer of MIPS, said. "While I am disappointed with the revenue results, MIPS Technologies is strong financially, and I am confident that our investment in intellectual property combined with cost reductions will result in us being strongly positioned for an industry turnaround."ARM's Saxby acknowledged that the electronics industry in general was experiencing difficult market conditions, but was able to point out that ARM continued to do well by expanding its customer base.

"Despite difficult market conditions in the electronics industry, our business continues to deliver strong performance and we continue to experience high demand for our products and services. We were encouraged to see that unit shipments grew, driven by a further five partners commencing shipments i n the quarter to June 30."

"Total unit shipments increased to 103 million units against 98 million in the previous quarter, with major gains in printers, digital cameras and handheld games," Saxby said.

Warren East, chief executive officer, added, "Demand for licenses to our technology has remained resilient, with license revenues in the third quarter more than double the corresponding level for last year.

"The endorsement of our next-generation ARMv6 architecture by both Texas Instruments and Intel in the last quarter as well as increased interest in our Jazelle Java acceleration technology and our new PrimeXsys platform solutions gives us continued confidence in the quality of our offering and our ability to innovate," he said.

In parallel with Saxby giving up the CEO's position, ARM has moved a number of key personnel and board members around. Tudor Brown was promoted to the main board and replaces East as chief operating officer. Mike Muller, chief technology officer, was also promoted to the main board.

Speaking on television in the U.K., Saxby said the moves would invigorate the senior management of the company and keep the company moving forward.