by CIO Staff

Infineon Spins Off DRAM Ops, Plans IPO

Mar 31, 20062 mins

German semiconductor maker Infineon Technologies will spin off its memory-chip business two months earlier than planned, with a public offering to be “the preferred next step,” the company said Friday at a news conference in Munich, which was webcast.

The new company, to be called Qimonda AG, will start operations on May 1, 2006. The designated chief executive officer (CEO) is Infineon board member Kin Wah Loh.

Rumors had been circulating for some time that Infineon intended to spin off its volatile DRAM (dynamic RAM) operations 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.

Qimonda will be the world’s fourth largest DRAM manufacturer, with revenue of 2.8 billion euros (US$3.8 billion) in 2005.

The company will have about 12,000 employees, of whom 4,700 will be in Germany. It will employ 1,700 people in R&D with more than 900 engineers in product development working at five main R&D facilities: two in Germany, one in Asia and one in the United States.

The new venture will have access to five 300-millimeter chip-manufacturing sites on three continents.

Infineon CEO Wolfgang Ziebart said a date for an initial public offering (IPO) is not set and will depend on numerous factors, including stock market conditions. The IPO would most likely be in a country where other chip makers are active, he said, without providing any names.

Infineon plans no further spinoffs, according to Ziebart.

Asked if the spinoff was part of a bigger plan to merge the unit with another chip maker to achieve a larger market position, Ziebart said that “size isn’t the target, but profitability. You can’t grow if you’re not profitable.”

-John Blau, IDG News Service

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