Irish chip designer makes positive noises

Parthus reports improved revenues from licencing its products, and suggests that the turbulent chip sector may be stabilising

Irish semiconductor designer Parthus pleased investors on Wednesday morning by delivering a upbeat financial statement. However, the firm warned that the outlook for the chip sector is still unclear.

Parthus announced significant increases in its licencing and royalty revenues in the three months to 30 June -- the second quarter of its financial year. Total income from licencing and royalties rose to £6.26m, compared to £5.69m a year ago.

This gave Parthus a pro-forma profit of £42,000 in its second quarter. The company had previously said it was aiming to achieve its first pro-forma profit in the third quarter of this year.

Parthus licenses intellectual property to many large technology manufacturers. In Wednesday's statement, the chip designer said it had signed important licencing agreements for both its digital audio and its Bluetooth platforms this year. It added that it was seeing strong demand for its mobile computing and GSP location technologies.

The semiconductor market has been under the cosh for well over a year, with manufacturers cutting production and slashing jobs in an attempt to survive the downturn. Increased demand for Parthus' technologies suggests the worst might be over.

"While semiconductor industry visibility remains challenging, there appears to have been a stabilisation in market conditions in the first half of 2002," said the company in its statement.

Shares in Parthus rose almost 5 percent in morning trading in London following the company's financial statement.

Under American GAAP accounting standards Parthus made a net loss of £1.47m in the three months to 30 June. Encouragingly for the company, this is an improvement on its performance in the first three months of this year when it lost £2.1m.

"While the semiconductor operating environment remains challenging, the combination of continued licensing growth, up 29 percent, a strong increase in royalties and prudent cost management with operating costs down 23 percent year-on-year has enabled us to achieve pro forma profitability one quarter ahead of stated objectives," said Elaine Coughlan, chief financial officer.

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