Further signals that the slump-stricken semiconductor industry is hauling itself off the floor came when ARM, the UK microprocessor designer, predicted a better year ahead.
The company, which licenses its processor technology to chip manufacturers around the world, said its own recent performance and soundings from the wider market indicated an improved outlook for 2004.
The semiconductor sector has spent several years in the doldrums with severe knock-on consequences for supplier companies such as ARM, whose technology is used in processors powering devices ranging from mobile phones to games consoles.
However, its latest results revealed that ARM boosted sales by £2.3m to £34m in the fourth quarter of 2003. Profits rose to £9m from £6.8m.
A further indication of ARM’s confidence came when it announced it would pay a dividend to its shareholders for the first time.
The company claimed it is now well placed to reap the rewards of maintaining a high level of R&D activity during the bad times.
This, according to the company, will enable it to bring new technology to the market just as conditions are improving. The Cambridge firm spent around one third of its total sales income on R&D in the fourth quarter.
ARM has also stayed on the acquisition trail, and last week announced it planned to buy Triscend, a US specialist in 32-bit microcontrollers, for around $15m (£8.2m).
The company is steadily picking up new business. This week Samsung licensed ARM’s 3D graphics technology for use in its next generation of mobile phones and PDAs.
Samsung said the ARM design would allow it to offer high-end graphics capabilities such as wireless gaming.
However, even as its market picks up, ARM is facing another problem which is not of its own making.
The company issues 90 per cent of its invoices in waning US dollars, but incurs most of its costs in rock-solid sterling. The current weakness of the dollar is hurting ARM, and the currency imbalance shaved just under £2m from its sales revenues in the fourth quarter alone. The company warned that if the dollar continues to slide the impact would worsen during the first months of 2004.