Qimonda Gets EU325 Million in Loan to Avoid Collapse (Update2)
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By Jeremy van Loon
Dec. 21 (Bloomberg) -- Qimonda AG will get a loan of 325 million euros ($452 million) from the German state of Saxony, Infineon Technologies AG and a Portuguese bank as part of a rescue package for the distressed German memory-chip maker.
Infineon will contribute 75 million euros, the unidentified bank 100 million euros and Saxony 150 million euros, Infineon said in a statement on the DGAP newswire today. The loan will allow Qimonda to maintain operations at its plant in Dresden, Germany, with 3,200 employees and build up research and development operations in Porto, Portugal.
Munich-based Qimonda has been hurt by sliding memory-chip prices this year as the economic slump cut demand. Earlier this month, the company said failure to find an investor may lead to a cash shortfall in the first quarter of 2009 that could put it out of business. The shares have lost 95 percent of their value since Dec. 31, cutting Qimonda’s market valuation to 78 million euros.
‘We have achieved the breakthrough,” said Thomas Jurk, Saxony’s economic minister, in a separate statement.
The German company’s larger competitors are also struggling with falling profit as the economic crisis takes its toll.
STMicroelectronics NV, Europe’s largest semiconductor maker, last month said fourth-quarter revenue and gross margin will miss forecasts. Sumco Corp., the world’s second-largest maker of silicon wafers, posted a 78 percent drop in third-quarter profit as a global recession cut orders.
Global Slowdown
Sales in the semiconductor industry will decline 16 percent globally in 2009 because of the global slowdown and lower consumer spending, research firm Gartner Inc. said Dec. 16. Next year may mark the first time the industry reports consecutive years of revenue declines, the researcher said.
Qimonda plans to use some of the loan to convert its Dresden factory to make “buried wordline” chips, where the architecture is changed to make chips smaller and reduce power consumption.
The German company also expects an additional 280 million euros in guarantees from Germany and Saxony, a package dependant on approval from national and European regulators, said Infineon, which holds a 77.5 percent stake in Qimonda.
The memory-chip manufacturer will report fourth-quarter results by mid-January, after auditors have assessed the company’s impaired assets.
To contact the reporter on this story: Jeremy van Loon in Berlin at [email protected]
Last Updated: December 21, 2008 11:41 EST
Email | Print | A A A
By Jeremy van Loon
Dec. 21 (Bloomberg) -- Qimonda AG will get a loan of 325 million euros ($452 million) from the German state of Saxony, Infineon Technologies AG and a Portuguese bank as part of a rescue package for the distressed German memory-chip maker.
Infineon will contribute 75 million euros, the unidentified bank 100 million euros and Saxony 150 million euros, Infineon said in a statement on the DGAP newswire today. The loan will allow Qimonda to maintain operations at its plant in Dresden, Germany, with 3,200 employees and build up research and development operations in Porto, Portugal.
Munich-based Qimonda has been hurt by sliding memory-chip prices this year as the economic slump cut demand. Earlier this month, the company said failure to find an investor may lead to a cash shortfall in the first quarter of 2009 that could put it out of business. The shares have lost 95 percent of their value since Dec. 31, cutting Qimonda’s market valuation to 78 million euros.
‘We have achieved the breakthrough,” said Thomas Jurk, Saxony’s economic minister, in a separate statement.
The German company’s larger competitors are also struggling with falling profit as the economic crisis takes its toll.
STMicroelectronics NV, Europe’s largest semiconductor maker, last month said fourth-quarter revenue and gross margin will miss forecasts. Sumco Corp., the world’s second-largest maker of silicon wafers, posted a 78 percent drop in third-quarter profit as a global recession cut orders.
Global Slowdown
Sales in the semiconductor industry will decline 16 percent globally in 2009 because of the global slowdown and lower consumer spending, research firm Gartner Inc. said Dec. 16. Next year may mark the first time the industry reports consecutive years of revenue declines, the researcher said.
Qimonda plans to use some of the loan to convert its Dresden factory to make “buried wordline” chips, where the architecture is changed to make chips smaller and reduce power consumption.
The German company also expects an additional 280 million euros in guarantees from Germany and Saxony, a package dependant on approval from national and European regulators, said Infineon, which holds a 77.5 percent stake in Qimonda.
The memory-chip manufacturer will report fourth-quarter results by mid-January, after auditors have assessed the company’s impaired assets.
To contact the reporter on this story: Jeremy van Loon in Berlin at [email protected]
Last Updated: December 21, 2008 11:41 EST
