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Infineon predicts Q3 profit surge

Dramurai rakes it in thanks to massive memory demend

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Euro chip company and Siemens spin-off Infineon yesterday predicted a "significant" rise in its Q3 income, pushing its profits for the quarter way above the E300 million ($281 million) it had been expecting.

The company cited increased demand for memory chips and the rise in prices that that demand has generated as the key factor in its raised expectations. Such demand was always going to drive earnings up, it said, which is why it was already expecting Q3 to out-perform Q1 and Q2, both of which generate income of around E250 million ($234 million).

Infineon also said that it expects Q4's income to be higher still - provided memory prices continue to increase at their current rate, largely driven by supply shortages, though Infineon was careful not to mention that particular point.

One of the Seven Dramurai, Infineon derives around 30 per cent of its sales from memory chips. According to the Financial Times, analysts had anticipated a downturn in profitability thanks to problems Infineon may yet experience meeting demand, in turn due to the company's limiting of production capacity following the fall in memory demand and prices of the mid-90s. ®

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