3 Tech Shops Powering Apple, Cisco

NEW YORK (TheStreet) -- Mobile devices, memory and storage are three tech sectors growing at a breakneck pace. ARM Holdings (ARMH), Netlogic (NETL) and Intevac (IVAC) are feeding the machine.

ARM Holdings

ARM Holdings, which licenses its technology to chip companies, has a long and expanding reach in the mobile device market. The Cambridge, U.K., chip designer works with low-power, fast-processing systems that are at the core of new devices -- like most smartphones and cutting-edge gadgets like Apple's(AAPL) new iPad.

Samsung uses ARM-based technology to make Apple's A4 chip, which is designed by P.A. Semi, an Apple subsidiary. Qualcomm(QCOM) is another customer. Its Snapdragon platform is ARM-based and at the heart of Google's(GOOG) Nexus One Android phone.

ARM processors are also used in new generation video devices. STMicro(STM) licensed ARM's tech for use in TV set-top box chips that process Internet video and digital broadcasts that support 3D viewing.

ARM posted solid fourth quarter numbers Tuesday and guided for a flat or better sales performance in 2010. And though sales fell 10% in 2009, ARM helped offset the drop by signing more licensing agreements. ARM says it also boosted its average chip count to 2.4 per phone, up from 2.1 in the prior quarter. This increase pays off as ARM collects royalties based on it proportion of the phone sales price.

ARM shares were up 7% to $9.62 Tuesday, close to their 52-week high of $9.91.

One potential blemish on ARM's bright canvas: The question of whether or not Apple is required to pay ARM's licensing fees and royalties for its new line of Samsung-made, P.A. Semi-designed chips. The fear is that Apple could put the A4 chip at the center of devices like the next iPhone and additional members of the iPad tablet family. So far, Apple hasn't shared many details about the technology used in the A4.