Imagination Technologies, which designs the chips that power Apple's iPad2 computer, believes that the number of devices containing its kit will surge to one billion a year before 2016.
The rise of smartphones, as well as the tablet market, boosted Imagination's performance in the year to 30 April, with revenues up 21 per cent to £98m and pre-tax profits of £24m. Its chips were in 245 million devices shipped, twice the number the year before, and it has unveiled even more ambitious targets.
The finance director, Trevor Selby, said: "We don't see any slowing down in the market. Four years ago we set a target of 200 million devices and we have comfortably surpassed that. We now predict our technology will be in one billion devices shipped in five years."
Alex Jarvis, an analyst at Peel Hunt, said hitting one billion devices would boost Imagination's profits to about £100m but the company needed to "demonstrate clearly" how it could achieve that figure.
Imagination draws up the blueprints of the technology, then licenses it to chip-makers. Mr Selby said that of the 1.9 billion mobile phones expected to be shipped in 2014, 1.3 billion would require "our sort of technology". Its products can also be found in computers, TV set-top boxes, radios and satnav systems. Its licensing revenues were higher than analysts expected at £28.9m, 13 per cent more than a year earlier. It also signed new contracts with companies such as Fujitsu, Apple and ST-Ericsson.
But its shares fell 4 per cent to 414.5p yesterday as the results were held back by its unit making "Pure" digital radios. Losses there widened from £900,000 to £3.8m owing to poor performance in the UK market.