ARM drops on cautious 2012 outlook - UPDATE
ARM Holdings was among the worst performers on the FTSE 100 on Friday after the firm's president yesterday gave a cautious outlook for 2012.
ARM Holdings was among the worst performers on the FTSE 100 on Friday after the firm's president yesterday gave a cautious outlook for 2012.
The microchip designer expects research and development (R&D) spending growth to slow next year due to an uncertain outlook in the smartphone and tablet markets, Tudor Brown told Dow Jones Newswire reporters in a technology forum in Taipei.
The company put aside $200m in R&D costs this year, up from $150m the year before.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Dow Jones writes that chip makers such as ARM, Taiwan Semiconductor Manufacturing Co and Hynix Semiconductor Inc predict that demand for their products could remain soft as a result of the economic slowdown in Europe and the US.
"Fundamentally ARM's business is in great shape, but remember, in 2009, when people went into meltdown and the whole world went into recession, we had a blip then in shipments. This wasn't disastrous, but it was down, now that could happen in 2012," Brown said.
"We're still cautious about next year, and we haven't gotten to messaging for 2012 yet realistically, but the message I know is going to be reasonably cautious," he added.
In contrast, ARM's chief financial officer Tim Score told reporters at a conference in Barcelona yesterday that "prospects are quite bright" for 2012, Dow Jones writes.
Meanwhile, chief executive Warren East said ""We are on that long-term journey and there certainly will be growth [in smartphones] in 2012."
Shares were down 3.69% at 599.5p by 14:53.
BC
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
Nationwide hikes FlexPlus current account fee by £5 a month – is it worth it?
Nationwide’s FlexPlus current account is a favourite with customers, but it’s worth checking whether you are taking advantage of the perks after the monthly fee went from £13 to £18
By Katie Williams Published
-
Santander launches online pension that offers up to £1,000 cashback
Santander's self-invested personal pension offers customers cashback of up to £1,000 if they invest before 25 April next year - here is everything you need to know
By Chris Newlands Published