Infineon spins off DRAM operations, plans IPO

Infineon spins off DRAM operations, plans IPO

German chip maker Infineon Technologies will spin off its memory-chip business two months earlier than planned, with a public offering to be the next step.

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 last week.

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

Rumours had been circulating for some time that Infineon intended to spin off its volatile dynamic RAM (DRAM) 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 $US3.8 billion in 2005.

The company will have around 12,000 employees, of whom 4700 will be in Germany. It will employee 1700 people in research and development 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 US.

The new venture will have access to five 300-millimetre 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 chipmakers 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 chipmaker 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".

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