23 Jan, 2009

German Chipmaker Qimonda Files for Insolvency

Struggling German chipmaker Qimonda has filed for insolvency at a court in Munich, a court spokeswoman said Friday. The Infineon subsidiary had received a 325-million-euro ($422-million) cash injection from the German state of Saxony, the federal government and a Portuguese development bank in December in a bid to keep it afloat. Dow Jones Newswires reported Thursday that an additional 300 million euros would have been needed to keep the company from going bust. But talks to secure additional financial support collapsed after the Saxony government refused to part with more funding and talks with Chancellor Angela Merkel’s government in Berlin also failed. In addition to its main factory in the Saxony capital Dresden in the east of Germany, Qimonda has a plant near Porto in Portugal. The company produces dynamic random access memory (DRAM) semiconductors, but competition from Asia and larger rivals has hit its bottom line. Qimonda has also suffered from a dramatic fall in prices for computer chips. Parent company Infineon last month said it had lost three billion euros in the financial year ending Sept. 30. Following the news, Qimonda said it would cut 3,000 jobs, a fifth of its workforce. In November, the company warned it might face insolvency if support was not forthcoming. (credit: www.dw-world.de)

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