Arm surges on appetite for chips

Arm Holdings, the British tech success story whose chips power Apple's iPhones and iPads, beat City expectations with £276.5m annual pre-tax profits.

The Cambridge company, which started in the 1970s making some of the earliest personal computers under the Acorn brand, saw pre-tax profits rise 16 per cent in the fourth quarter to £80m, thanks to the surging global demand for smartphones and tablets.

It shipped 2.5 billion chips in the last three months of last year. Total profit for Arm, whose chip designs are used in the iPad and iPhone, rose 20 per cent in 2012. Its shares were up 39p at 931p, making it one of the highest risers in the FTSE 100.