Poor memory chip sales widen Infineon Q2 losses

Infineon Technologies failed to stem its loss in its fiscal third quarter largely due to the poor performance of its memory chip spin-off Qimonda.

German chip maker, Infineon Technologies, failed to stem losses in its fiscal third quarter largely due to the poor performance of its memory chip spin-off Qimonda.

Net loss in the third quarter swelled to Euro 197 million ($US144 million as of June 30, the last day in the period being reported), compared to Euro 23 million in the same period a year earlier.

In addition to restructuring charges, a main contributor to the increased loss was Qimonda, which remains a subsidiary and earlier this week posted a loss of Euro 218 million in its third quarter after a profit of Euro 54 million the year before. Third-quarter revenue of the memory-chip maker plunged 24 percent to Euro 740 million.

Excluding Qimonda, Infineon posted earnings before interest and taxes of Euro 13 million, compared to a loss of Euro 28 million in the year-earlier period.

Without Qimonda, the Munich manufacturer reported third-quarter revenue of Euro 1 billion in the third quarter, up from Euro 978 million the year before.

Last year, Infineon spun off its volatile DRAM operations into the new Qimonda unit to focus on more lucrative areas such as chips used in mobile phones, automotive electronics and security systems.

DRAM chips are used in numerous products but, in particular, as the main memory in personal computers, a highly competitive business that has been subject to intense price pressure in recent years.

In the fourth quarter, Infineon expects revenue to increase, fuelled by demand from mobile phone makers.

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John Blau

IDG News Service
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