LONDON -- The shares of Imagination Technologies (LSE:IMG) slid 19 pence, or 4%, to 430 pence during early London trade this morning even though the embedded processor designer claimed its customers had performed "ahead of target."

The FTSE 250 mid cap said its partners had "shipped" 237 million chips based on the company's own designs during the six months to October. The performance was 90% up on last year and prompted Imagination to advance its full-year projection to 500 million chips.

Imagination also described its long-stated goal of its partners using a billion of its chips annually by 2016 as "a realistic objective."

Imagination's customers include AppleMotorola and Samsung, and its processor designs are used in a wide variety of mobile phones, tablets, game consoles, televisions, and set-top boxes.

The chip shipment details were announced alongside Imagination's half-year results, which showed turnover climbing 27% to 71 million pounds and adjusted profits gaining 10% to 17 million pounds. Royalty revenues jumped 66% to 39 million pounds, while net cash stood at 55 million pounds.

Hossein Yassaie, Imagination's chief executive, said:

Our 'smart' technologies continue to be adopted across new and existing partners, creating a solid base for continued momentum in future volume growth...We remain confident of our continued good progress given the growing demand across our IP families, the growth in design wins across a widening range of end user markets and the momentum in our partners' chip volume.

Prior to today, City experts that study Imagination reckoned current-year earnings were on their way to improving 13% to 12.4 pence per share. Such projections value the company at a racy 37 times potential profits.

Forecasts for 2014 suggest earnings of 17 pence per share.

Of course, whether today's shipment news and half-year results can justify the current valuation -- and signal Imagination as a "buy" -- remains your decision.

Still, only four years ago, these shares traded at just 32 pence. Smart investors who spotted Imagination's growth potential back then have since earned a 13-fold gain -- equivalent to an astonishing 91% annual compound average return.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.