Chip designer ARM said it was optimistic that reductions in inventory by device makers which is dampening demand for semiconductors would be short-lived, bolstering its confidence in its own outlook for 2012.

We are seeing some ARM licensees looking beyond that and the body language is more positive than a quarter ago, Chief Executive Warren East said on Thursday.

Chipmakers, including Texas Instruments , reported weak third-quarter sales and were downbeat about the fourth quarter, reflecting consumer woes in Europe and the United States.

Research group Gartner said on Thursday that an inventory correction was well under way, and it expected the process to cool sales for at least the remainder of the year before sequential growth could return in 2012.

Cambridge, England-based ARM, whose processor blueprints are licensed by chipmakers such as TI and Samsung <005930.KS>, said it would grow royalties faster than the market in 2012, driven by hot products like Apple's iPhone 4S, which is powered by its designs.

We expect next year to be another year of significant growth for smartphones, East told the Morgan Stanley technology, media and telecom conference in Barcelona.

He said, however, that the number shipped would undoubtedly be affected by economic conditions.

In Taipei, ARM president Tudor Brown said he expected the semiconductor industry to grow by a few percent in 2012.

In Barcelona, Chief Financial Officer Tim Score was also confident that the group would meet analyst forecasts for licensing after particularly strong demand so far this year.

Prospects looking into 2012 are quite bright, he said. Market consensus for 2012 ... we are comfortable with that.

ARM's chipmaking partners are eyeing PCs and servers, sectors dominated by Intel's architecture.

East said the company's confidence about the server market had gone up in the last 12 months, while its penetration in the PC market would be low and slow.

By 2014-2015 there's no high expectation for traditional form factors, he said, possibly alluding to opportunities in new categories of products that combine the features of tablets, such a long battery life, with notebooks.

(Writing by Paul Sandle; Editing by David Cowell)

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