UK-based microchip developer ARM saw its net profits more than double in the third quarter of 2011, owing to strong demand for smartphones and tablets.

The company’s net profit for Q3 2011 ending on 30 September was US$50.4 million compared to US$23.7 million in Q3 2010. Revenues hit US$192.3 million – 22 percent higher than the same period in 2010.

ARM generates revenue by licensing its technology to semiconductor makers rather than manufacturing and selling its own chips. ARM-based technology is found in numerous smartphone and tablet devices, including Apple’s iPhone and iPad.

During the third quarter, 1.9 billion ARM-based chips were shipped, 1 billion in mobile phones and computers (up 10 percent) and 900 million for consumer and embedded digital devices such as smart meters and sensors (up 50 percent).

The company now has 28 processor licence customers with 14 new customers added during the most recent quarter. ARM CEO Warren East said there is a “high level of design activity” with a focus on “smarter, low-power chips" prompting companies to licence ARM technology for the first time.

“With customers looking to design ARM technology into a widening product portfolio, ARM is continuing to invest in the development of new products to drive long-term growth in our revenues, profits and cash,” East added.

ARM is expecting a strong fourth quarter with plenty of opportunities for further licensing and a “historically high” order backlog. According to the Wall Street Journal, ARM’s stock has risen 34 percent since the beginning of the year.