7m (232.4m) and operating margins up 32.7%.

Licensing momentum remained strong, up 19% yearon- year, 71 processor licences were signed, bringing the cumulative total to 398, and a record 499 million ARM powered products were shipped.

ARM is best known for the chips it designs and licenses for use in mobile phones throughout the world, but the company says it is now enjoying rapid growth in non-mobile unit shipments, up 46% year-on-year.

Warren East, ceo, said: '2005 has been another successful year for us, and we enter 2006 well placed to build on our marketleading position.'

Tim Score, cfo, said: 'We have grown revenues at twice the rate of the semiconductor industry, achieved operating margins healthily in excess of 30% and seen volumes of ARM powered products grow by more than 30% year-on-year to 1.66 billion units.

'Notwithstanding the 20% increase in R&D expenditure to drive expected strong revenue growth, a 24% increase in earnings per share has enabled us to return more cash to shareholders via our progressive dividend policy and the ongoing share buyback programme we introduced during the year.'