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To: maceng2 who wrote (81)	10/15/2002 5:51:48 AM
From: maceng2	Read Replies (1) \| Respond to of 1417

UK chip pioneer sees profits halve news.bbc.co.uk Times are hard for microchip makers The UK's number one chip designer has, a fortnight after warning of collapsing profits, revealed it is to axe one in 10 staff. Arm Holdings, cautioning over the "length and severity" of the chip sector downturn, said that profits for the July to September period had slid by more than a third from those reported a year before. And the "uncertain outlook" over trade in the medium term had prompted the need for further job cuts. "By taking decisive action to reduce our employee costs now, we will be better positioned to benefit from any improvement in market conditions," chief executive Warren East said. Cutting edge The profits of £8.0m for the quarter, compared with £12.9m a year before, were in line with those revealed two weeks ago in an earnings forecast which prompted a 60% fall in Arm's share price. Arm, one of the most successful British firms to emerge from the hi-tech boom, had been thought to have been relatively immune from the tech downturn. As a chip designer, rather than manufacturer, it had been hoped that its cutting-edge technology would support revenues. Last year saw revenues continue to increase despite the global slump in the semiconductor business. Deal delays But with revenues down 11% to £33.3m, the situation has now changed, with hopes dashed of an upturn in the second half of 2002. "Indeed, conditions deteriorated further in the [July to September] quarter, resulting in a deferment of activity by our partners and therefore a slowdown in licensing activity," Tuesday¿s statement said. The "unpredictable timing" of the closing of licensing deals meant revenues were lightly to remain "flattish", the firm added. But it said there was no evidence it was losing trade to competitors. Arm shares stood 10.3% lower at 41.25p in early trade in London on Tuesday