ARM's new Cortex-A72 processor design and related technology improvements come as the smartphone industry struggles with cooling demand after years of explosive growth sparked by Apple Inc's iPhone in 2007.
Investors are concerned about lower royalty rates for ARM as growth in the smartphone market shifts to China, where consumers typically buy devices priced at $200 or less, compared with more than $600 in the United States.
Rather than making its own chips, ARM licenses its processor technology to other semiconductor companies, including Qualcomm Inc and Samsung Electronics Co Ltd, as well as to Apple. It receives royalties based on the selling prices of chips shipped by its partners.
ARM's new processor has 3.5 times the performance of comparable chips from 2014, executives said at an event in San Francisco.
The chip design will also deliver a 75 percent reduction in energy use, helping reduce battery drain on smartphones, they claimed.
Some of the improvements will be due to advances in manufacturing technology at contract manufacturers like Taiwan Semiconductor Manufacturing Co Ltd, the Cambridge, U.K.-based company said.
Nandan Nayampally, ARM's vice president of marketing, said with the Cortex-A72's increased computing horsepower, smartphones and tablets will be able to handle complex computing like voice analysis without having to connect to the Internet.
Many compute-heavy tasks on smartphones today are handled remotely in data centers owned by Internet heavyweights like Amazon Inc, Google Inc and Facebook Inc instead of by the smartphone's processor, with results instantly sent to the device.
"There's more than enough performance on tap (for) increasing complexity on the local device," Nayampally said, adding that devices made with the new chip technology would likely ship in early 2016.
Ten companies have licensed the new technology, including China's Rockchip and Taiwan's MediaTek Inc, ARM said.
ARM shares were up 0.6 percent to $47.64 in Nasdaq trading.
© Thomson Reuters 2015
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