The price war between the memory makers of the world really is over. SanDisk (NASDAQ:SNDK) put the final John Hancock on the peace accord when it did one better than Micron Technology (NYSE:MU) -- not only did pricing stabilize, but SanDisk actually made a profit!

That was unthinkable last year, and still a distant dream for most memory chip makers as recently as last quarter, when SanDisk eked out a slim profit. But SanDisk did no eking this quarter, pulling out a hefty $231 million profit on $935 million in sales, which is up from a $166 million loss on $821 million in revenue a year ago. SanDisk doubled the number of gigabytes sold year-over-year and shipped out 31% more units. And most importantly, average selling prices per gigabyte dropped 43% year-over-year but only 3% from the previous quarter.

Not long ago, the 43% price fall would have been closer to the quarter-over-quarter figure. Those days are over. As CFO Judy Brumer explains it, "We implemented price increases for selected products in both the retail and OEM channels." The slightly weaker average unit price "was primarily due to the mix of products sold" as consumers went for cheaper storage cards.

Memory producers like Micron, Samsung, and Intel (NASDAQ:INTC) have stopped building out their manufacturing lines for memory chips while end-user demand took one foot out of the grave. And when Qimonda went belly-up under the constant pricing pressures, Texas Instruments (NYSE:TXN) bought some of Qimonda's memory-making machinery to crank out more analog signal processors next year. That's another decent chunk of memory-production capacity off the table.

Management sees a stable supply/demand equation in time for the holidays, driven by the smartphone market where SanDisk has focused its OEM sales efforts. The top 10 smartphone designers that provide memory card expansion slots buy at least some of their bundled memory from SanDisk, including biggies like Motorola (NYSE:MOT) and Research In Motion (NASDAQ:RIMM). Of course, the Apple (NASDAQ:AAPL) iPhone line doesn't come with card slots -- but SanDisk still hopes to see orders from Cupertino if Toshiba can't keep Apple fully stocked with memory chips.

SanDisk shares jumped 10% on this impressive report, breaking the 52-week-high barrier. SanDisk is still about 50% cheaper than it used to be back in 2007, before that infernal price war started. Will SanDisk scale those heights again? Stranger things have happened. This wouldn't be a bad time to invest in the surviving memory stocks.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Apple is a Motley Fool Stock Advisor recommendation. Intel is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.