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Two billion processors designed by ARM shipped in the first quarter of 2012, banking the UK chip biz forecast-busting profits for Q2.

While the rest of the semiconductor industry apparently suffered a 4 per cent slump year-on-year in shipments, the Cambridge-based company said it enjoyed a 9 per cent rise - marking the highest number of processor dies shifted in a quarter for the fabless silicon scribblers.

But that's according to the latest figures from the firm, which collected royalties of about 4.8 cents per chip on average from its low-power processors that end up in Apple iPads and iPhones, Android mobes and a zillion other devices. A strong demand for smartphones, tablets and digital tellies was said to have pumped up the company's bottom line.

ARM beat analysts' expectations to post unaudited Q2 2012 revenues of £135.5m ($213m), up 15 per cent year-on-year, and adjusted profit before tax of £66.5m ($103m), up 23 per cent on the same period in 2011.

The company said it nudged up its average royalty from 4.5 cents a year ago mainly because chip makers are popping multiple processor cores into devices.

ARM doesn't manufacture the processors it designs. Instead it licenses the blueprints to corporations, which then usually bolt some memory and a load of peripheral interface electronics - such as Wi-Fi and Bluetooth - onto the ARM core and manufacture them as a system-on-chip.

Such small packages are tailor-made for specific applications and can be tuned in terms of power consumption and performance for whatever gadget they'll end up in.

"ARM’s royalty revenues continued to outperform the overall semiconductor industry," sniffed CEO Warren East in a statement, "as our customers gained market share within existing markets and launched products which are taking ARM technology into new markets."

Those new markets may soon include servers and other non-portable gear as ARM touts to manufacturers its 64-bit v8 processor architecture - which features an instruction set that's such a departure from its classic 32-bit design, some developers whisper it resembles MIPS64.

However, chief financial officer Tim Score admitted to Reuters that economic uncertainty could hit demand for ARM's cores later in the year. ®

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