March 05, 2012
Electronics IP Industry - Q4 2011
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Russ Henke - Contributing Editor

by Russ Henke - Contributing Editor
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Herein we return our attention to
the phenomenon of the rise of Intellectual Property (IP) in the world’s Electronics Industry, a segment of Electronic Design Automation (EDA) that Henke Associates began reporting on separately in 2003. 

At the beginning, we covered eight (8) publicly-traded IP companies (called the "Group-of-8" or "G8"), as representative of the financial state of the nascent Electronics IP Industry. Subsequently, ARM absorbed Artisan Components in 2004; Mentor Graphics acquired LogicVision in 2009; and Synopsys bought Virage Logic in 2010. So nowadays, when we report on the Electronics IP Industry quarterly financials, the G5 listed below are included: 

The Q2 2011 financial results of the G5 IP vendors were posted here on August 22, 2011, just at the beginning of a period of economic volatility that was precipitated by the US Government's debt ceiling debate in Washington DC and subsequent reduction of the USA’s credit rating by S&P from AAA to AA+.

The aforementioned continuing volatility in the economy was visible to anyone looking at the stock markets’ performances by the time of the posting of the Q3 2011 IP Industry Commentary on November 14, 2011. Below is a graph of the six months of the NASDAQ Composite leading up to November 14. Please note: (a) the relative stability of the Composite curve at just above the 2800 level for the initial months shown till late July 2011; (b) the steep plunge to below 2400 by mid-August 2011; (c) the relatively wild oscillations from mid-August 2011 through mid-November 2011; and (d) never closing at 2800 or above during the
entire reporting period after mid-August 2011.. 

NASDAQ Close Nov 04 = 2686.15

52 week range = 2298.89 – 2887.75 

Indeed, it was not until January 25, 2012 that the NASDAQ Composite finally closed above 2800 again, rising at an average slope of over 41 points per week for the four weeks between January 20 and February 17, as the US economy began to show consistent improvement:                                                        

NASDAQ Close Feb 17 = 2951.78

52 week range = 2,298.89 - 2,962.78

For the period between December 26, 2011 and February 16, 2012, the NASDAQ Composite index grew from 2590 to 2960 or 370 points in 33 trading days, averaging about 11 points gain every day the market was open.


G5 Electronics IP Vendor by Vendor Details –
Q4 2011

As we did for Q3 2011, let’s first look at the

individual performances of each member of the Group of Five (a.k.a. the G5) Electronics IP players for nominal Q4 2011. Then we’ll follow up with a summary of the by-now-familiar Tables of Revenues and Profits of the entire G5 for Q4 2011 (and the four quarters leading up to Q4 2011), as well as some graphs of previous year-by-year P&L’s.

On January 31 2012
ARM Holdings plc announced its unaudited financial results for Q4 2011 & full year ended December 31, 2011.

Progress on key growth drivers in Q4 2011

Growth in adoption of ARM® processor technology
  • 25 processor licenses signed, including the first lead licenses for processors based on the new ARMv8-A architecture
  • 9 Cortex™-A and 8 Cortex-M family processor licenses signed
  • Many of the advanced processor licenses signed with companies developing smarter consumer electronics technology such as digital TVs, mobile computers and smart phones
  • Growth in shipments of chips based on ARM-processor technology
  • 1.2 billion chips shipped into mobile phones and mobile computers, up 10% year-on-year
  • 1.0 billion chips shipped into consumer and embedded digital devices, up 40% year-on-year
  • Growth in outsourcing of new technology
  • Physical IP: 20nm royalty-bearing platform signed with major foundry and 3 Processor Optimization Pack (POP) licenses signed for Cortex-A series processors
  • Mali™ Graphics: 5 Mali licenses signed for digital TV, mobile computing and smart phones


    ARM Revenue in IFRS in Q4 2011 was 137.799 million pounds, up 20.93% year over year compared to 113.946 million pounds in Q4 2010.

    ARM Revenue in IFRS in Q4 2011 was $217.722 million, up 21.94% year over year compared to Q4 2010 of $180.018 million.

    ARM Net Income in IFRS in Q4 2011 was 33.074 million pounds, up 11.33% year over year compared to 29.709 million pounds in Q4 2010.

    ARM Net Income in IFRS in Q4 2011 was $52.257 million, up 11.33% year over year compared to $46.940 million in Q4 2010.

    Warren East, Chief Executive Officer, said:

    "In Q4 and throughout 2011 ARM has seen strong licensing growth, driven by market-leading semiconductor companies increasing their commitment to ARM technology, and more new customers choosing ARM technology for the first time.  We have also seen our royalty revenue continue to grow faster than industry revenues as the ARM Partnership gains share in our target markets.”

    Warren East

    “2012 will bring exciting opportunities and challenges as ARM enters competitive new markets where we are well positioned to succeed with leading technology, an innovative business model and a thriving ecosystem of Partners. As our customers are designing more ARM technology into their widening product portfolios, ARM is investing in the development of new products. These products will drive further long-term growth in our revenues, profits and cash." 


     Revenue for the Year

    ARM Revenue in IFRS for the full year 2011 was 491.826 million pounds, up 20.96 year over year compared to 406.595 million pounds for the full year 2010.

    ARM Revenue in IFRS for the full year 2011 was $786.922 million, up 24.84% year over year compared to $630.322 million for the full year 2010. with 2011 benefitting by a +3.2% difference in fx rates in 2011 vs. 2010.

    CEO Warren East predicted $763 million for a likely 2011 total revenue figure for ARM 3 months ago.

    You can find the full EDACafe event calendar here.

    To read more news, click here.

    -- Russ Henke, Contributing Editor.

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