Toshiba's profits have jumped 75.8%, despite a large fall in the price of the memory chips used in digital music players, cameras and mobile phones.
Toshiba President Atsutoshi Nishida says chip prices will continue to fall.
The world's second-largest maker of NAND flash chips, it made a net profit of 137.4bn yen (£576.7m; $1.16bn) for the year to March 2007.
Although the price of the chips fell 60%, their strong sales compensated.
Toshiba said it also benefited from good profit growth in its other units, such as power plant group Westinghouse.
'Further price cuts'
Total sales at the Japanese firm, which also makes televisions and household appliances rose 12.2% to 7.12 trillion yen.
Toshiba predicted that for the present year, net profit will fall 17.4% partly because of consolidation at Westinghouse, which it bought from British Nuclear Fuel.
The price of NAND flash chips have fallen due to intense competition in the sector.
Toshiba estimates prices will fall another 50% this year.