LONDON -- Shares in microchip builder ARM Holdings (LSE:ARM) (NASDAQ:ARMH) have come under heavy pressure over the past month, dipping 12% from March's record peak above 971 pence and stemming the stock's stellar rise dating back to last autumn.

Waning appetite for the firm was compounded late last month when it was announced chief executive Warren East -- who has held the post for 12 years and is the architect of ARM's emergence as a leader in the semiconductor industry -- will leave the company during the summer. This has raised questions over the future direction of ARM.

Even despite these concerns, I believe that the company -- which designs and licenses intellectual property for semiconductors -- lacks a compelling investment case at present prices, and its medium-term earnings projections appearing to be factored in at current levels.

Excellent earnings growth priced in
Earnings per share are expected to leap 29% to 19 pence in 2013, according to broker estimates, before rising a further 26% next year to 24 pence.

The company currently changes hands on a P/E rating of 46.7 and 37 for 2013 and 2014 respectively, representing a massive premium to a forward earnings multiple of 19.1 for the entire technology hardware and equipment sector. I believe this suggests that, despite a weighty share price drop in recent weeks, these juicy growth rates are currently priced in and that further upside could prove challenging.

Fears of slowing tablet PC and smartphone demand have gathered pace in recent months, a move that would dent royalty income for ARM. However, I believe that these concerns have been overplayed. Indeed, tech research firm ABI Research commented just this week that tablet computer sales should rise 28% in 2013 to $64 billion, with volumes up 38% at 150 million.

However, industry rival Intel is making huge inroads into ARM's key tablet and smartphone tablets, and this could put the company's revenue under pressure looking further ahead.

Dividends rising but still below par
ARM fails to provide investors chunky dividends at the moment. The company has steadily built payouts in recent years, with 2012's dividend of 4.5 pence up 29% from the previous year. And brokers expect the dividend to come in at 5.4 pence and 6.9 pence this year and next.

Despite this, ARM does not offer investors alluring dividend prospects in the medium term, with projected yields of 0.6% and 0.8% for 2013 and 2014, respectively -- well below the current forward FTSE 100 average of 3.3%.

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Fool contributor Royston Wild has no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.