By Jane Lanhee Lee
SAN FRANCISCO (Reuters) – SoftBank Group Corp’s chip technology firm Arm Ltd on Thursday reported record revenue for 2021, and Chief Executive Rene Haas told Reuters its business for new chip designs indicates a strong outlook.
SoftBank plans to take the British tech company public. Regulatory hurdles stopped a deal to sell it to U.S. chip maker Nvidia Corp.
Arm, which makes the basic blueprint used to design chips, had revenue of $2.7 billion last year, up 35% from the previous year. Licensing business revenue rose 61% to $1.13 billion and royalties, tracking the numbers of chips sold using Arm technology, rose 20% to $1.54 billion.
Haas said the licensing business is “all about companies spending money with Arm about designing chips for the future”.
Asked about the revenue outlook, he said: “We’ve never done over a billion dollars. So I would say that’s a good leading indicator of the demand for the product.”
Haas said 29.2 billion chips using Arm technology were shipped last year, nearly 8 billion in the fourth quarter. He said Arm’s focus on the automotive sector three to four years ago was paying off and revenue from that segment more than doubled last year thanks to electrification and increasing computing power for cars.
“It probably would have been better if there was more supply,” said Haas about Arm’s automotive business.
Haas declined to talk about the potential value Arm could fetch on the stock market. In September, 2020 Nvidia had proposed to pay up to $40 billion for Arm. SoftBank bought it for $32 billion.
Haas also reiterated that Arm has resolved a public dispute at its Chinese joint venture, ousting former Chief Executive Allen Wu. He said the venture, Arm China, makes up about 20% of the company’s revenue.
“One thing I can say is we had great results in this last year and it wouldn’t have happened without the China JV doing well,” he said.
(Reporting By Jane Lanhee Lee; Editing by David Gregorio)