The technology sector merger rumour mill has been gradually ramping up in recent months and we expect UK chips design champion ARM (ARM) will be at the centre of speculation this summer, creating a potential short-term trading opportunity. ARM is currently trading at £11.56.

Several multi-billion dollar deals have been struck in the technology hardware space in recent weeks, the most recent Intel’s (INTC:NDQ) $16 billion swoop to purchase of rival Altera (ALTR:NDQ). Other deals have seen chipmaker Avago Technologies (AVGO:NDQ) snap up Broadcom (BRCM:NDQ) in a $37 billion deal, and NXP Semiconductors (NXPI:NDQ) get into bed with rival Freescale (FSL:NYSE).

Cambridge-based ARM is no stranger to buyout speculation, it has been linked countless times to possible takeovers during the past 10 years, although nothing more than a hint of a deal has ever materialised. Most recent speculation put ARM at the centre of a possible £15.00 per share buyout by Apple (AAPL:NDQ), its biggest single customer. Shares has always maintained that such a deal is unlikely given the fact that roughly 95% of the world’s mobile device are based on ARM architecture, capping much of the upside of a deal for the US tech giant.

The counter argument suggests Apple could attempt to buy ARM as a defensive move, so it can shut-out competition from using what is widely accepted as the most advanced low-power semiconductor chips designs in the world.

Either way, ‘watch ARM get caught in the crosshairs of M&A chit-chat,’ says Panmure’s respected technology analyst George O’Connor.

Flat since mid-March despite a strong operating performance this year, M&A could be an exciting short-term share price upside catalyst.