LONDON, UK: British chip designer ARM signed a new licensing agreement with Microsoft, it said on Friday, lifting its shares more than 6 per cent.

The agreement deepens ARM's 13 year relationship with Microsoft, giving the U.S. group access to ARM architecture instead of licensing products one by one.

Microsoft, whose Windows software runs nine in 10 of the world's PCs, traditionally designs its software around chip architecture from ARM rival Intel.

"With closer access to the ARM technology we will be able to enhance our research and development activities for ARM-based products," Microsoft General Manager KD Hallman said.

ARM shares were up 6.6 per cent by 0835 GMT, the top gainers in the European technology index.

Microsoft reported a 48 per cent jump in quarterly profit late on Thursday, and said business customers were returning to the market for personal computers.