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(Repeats to additional subscribers) * Infineon raises 2011 sales, profitability outlook
* Infineon fiscal Q1 oper profit 177 mln eur vs poll 165 mln * ARM Q4 beats estimates
* ARM expects to outpace more typical market growth in 2011
* Infineon shares gain 1.6 pct, ARM up 2.4 pct
(Adds analyst comment, updates shares)
By Nicola Leske and Paul Sandle
FRANKFURT, Feb 1 (Reuters) - German chipmaker Infineon (IFXGn.DE) and British chip designer ARM Holding ARM.L expect semiconductor demand to remain robust after a strong quarter, signalling stability for the notoriously volatile sector.
Infineon, which has clawed its way back to profitability over the past 18 months, raised its outlook for 2011 on Tuesday, due to demand in the automotive and industrial electronics sectors. [ID:nLDE70U0ZO]
ARM said its position in fast-growing segments such as smartphones left it well placed for this year.[ID:nLDE70U286]
Infineon stock gained 1.6 percent and ARM shares rose 2.4 percent by 1016 GMT, both outperforming the technology index .SX8P.
The industry, which had an exceptionally strong 2010 thanks to restocking and signs of an economic upswing, is expected to return to slower, more typical growth rates this year.
Worldwide semiconductor revenue is forecast to grow 4.6 percent this year compared with 2010, when sales increased by 31.5 percent, according to research firm Gartner.
"We expect to grow faster than the market and see another quarter of revenue growth with consistently high margins," Infineon Chief Executive Peter Bauer said on Tuesday, echoing rival STMicroelectronics (STM.PA), which said it expects sales to grow faster than the market.
Infineon, which makes chips for products ranging from cars to electronic passports, said it expected its full-year operating result as a percentage of sales to be in the high teen percentage range.
Revenue growth for the financial year through September should be around 15 percent, it said, exceeding analyst expectations of 11.6 percent, with an operating margin of 18 percent.
Infineon previously said it expected full-year revenue growth of almost 10 percent and an operating margin in the mid to high teens percentage of sales.
For the current quarter, it said it sees sales rising slightly compared with its first quarter ended Dec. 31.
"We see little risks that demand should ease any time soon," Eerik Budarz at brokerage Sylvia Quandt said, adding that the raised outlook was slightly better than already positive expectations.
For a graphic: r.reuters.com/gar77r
ARM ARM.L beat an average forecast for its fourth-quarter results and said it expected group dollar revenue for 2011 to be "at least in line" with market expectations of about $695 million as it continued to gain market share.
That implies growth of at least 10 percent, brokerage Numis said in a note.
ARM, whose architecture is licensed to chipmakers like Qualcomm (QCOM.O) and Samsung (005930.KS), is thriving thanks to a boom in smartphones and tablets. Nearly all the world's mobile phones use ARM's low-power technology, as do most tablets -- a category that hardly existed before the debut of Apple's (AAPL.O) iPad in April.
ARM's success in mobile computing was endorsed last month by Microsoft (MSFT.O), with its decision to configure Windows for ARM chips, sending shares in the Cambridge-based company to a 10-year high. [ID:nLDE70502Q]
Finance director Tim Score said the deal underscored ARM's potential.
"The ARM addressable market is growing at both ends of the spectrum, both in terms of the microcontroller, industrial automation and domestic end, and in smart phones, mobile computing and ultimately into computers and servers," he told reporters on a conference call.
Infineon exited the mobile chip business last year by selling its wireless chip unit to Intel for $1.4 billion and now has three divisions: automotive, industrial & multimarket and chip card security. (Additional reporting by Harro Ten Wolde, Christoph Steitz and Ludwig Burger; Editing by Erica Billingham)