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Profit Jumps at Qimonda

Sales rise 60%.

Fourth-quarter profit nearly tripled at memory chip maker Qimonda (QI) , as sales rose 60%.

The Munich-based company said Tuesday that profit rose to 156 million euros from 54 million euros a year earlier.

Sales rose to 1.23 billon euros from 767 million euros a year earlier.

Sales were driven by higher bit shipments and higher average selling prices based largely on Qimonda's continued successful product diversification, the company said.

Diversification was driven mostly by graphics DRAM, followed by infrastructure and consumer applications. Overall bit-shipments increased by 17% in the fourth quarter compared with the previous quarter. North American sales generated 42% of the company's total sales.

Qimonda's improvement of its gross margin and net income was mainly due to improved average selling prices in the fourth quarter, which helped to limit the overall decline of average selling prices to 20% year-on-year.

Qimonda expects bit production to grow by about 10% to 15% in the first quarter of the 2007 financial year. The company expects this bit growth to be based on additional capacity, mainly from foundry partners, and improved productivity as a result of the continued conversion of capacities to 90-nanometer technology.

Qimonda also expects to maintain a share of bit-shipments to non PC applications significantly above 50% after the seasonally strong customer demand for consumer and gaming applications in the last quarter.

For the full year, Qimonda expects bit demand to be driven in part by the introduction of

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Windows Vista operating system and the continued strong growth for DRAM in consumer and communication applications. The company expects the market measured in bits to grow between 55% and 65%.

Qimonda intends to increase bit production in line with overall market growth based on its investment in additional capacities in its Richmond 300mm manufacturing facility as well as the ramp-up of the second 300mm module at Inotera.

In addition, Qimonda expects productivity improvements in manufacturing during 2007 as it converts further production to 90nm technology and begins the transition to next generation 80nm and 75nm technologies.

Shares of Qimonda, which was

recently spun off from



, closed Tuesday up $1.01, or 6.8%, to $15.98.